Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1. (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”): (1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets; (2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b); (4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4); (5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture; (6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business; (7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed; (8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit; (9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business; (10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven; (11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary; (12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b); (13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and (14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets. (c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07. (d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness. (e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company. (f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred. (g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit. (h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 5 contracts
Sources: Indenture (Continental Resources, Inc), Indenture (Continental Resources Inc), Indenture (Continental Resources Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company shall not and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such however, that the Issuers and the Guarantors may incur Indebtedness is incurred by the Company (including Acquired Debt) or any Guarantor andissue Disqualified Stock, in each case, if the Company’s Consolidated Fixed Charge Coverage Leverage Ratio for at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the same had occurred at the end of the most recently-recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or available, would have been no greater than 2.25:17.00 to 1.00.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(2) the incurrence on the Closing Date by the Issuers and the Guarantors of Parity Lien Debt represented by the Notes and the Note Guarantees;
(3) 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 (whether or not incurred at the time of such purchase, design, construction, installation or improvement) all or any part of the purchase price or cost of design, construction, installation, integration or improvement of property, plant or equipment used in the business of the Company or any Guarantors (whether as borrowers of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or guarantors) under one or more Credit Facilities in an aggregate principal amount at discharge any one time outstanding under Indebtedness incurred pursuant to this clause (1) 4), not to exceed the greater of (x) $1,000.0 5.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or at any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)time outstanding;
(4) 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 Section 4.09(a) hereof or clauses (1), (2), (3), (4) or (13) of this Section 4.09(b);
(5) 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 that:
(A) if either Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not either Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuers, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (45);
(56) guarantees the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any Indebtedness such Disqualified Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(7) the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into Hedging Obligations in the ordinary course of business for or incurred to hedge or manage any interest rate risk on any fixed or floating rate Indebtedness that was permitted to be incurred under the purpose first paragraph of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company this covenant or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed“Permitted Debt”;
(8) (i) the Guarantee by the Guarantors of Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in of the ordinary course Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of business this covenant; provided that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed; and (bii) other letters the Guarantee by Restricted Subsidiaries that are not Guarantors of creditIndebtedness of Restricted Subsidiaries that are not Guarantors to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant;
(9) the incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, surety, bid, performance, appeal or similar bondsself-insurance obligations, bankers’ acceptances, completion guarantees or similar instruments; provided thatperformance, in each case contemplated by this clause (8), upon the drawing of such letters letter of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) completion or performance and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising surety bonds in the ordinary course of business;
(10) Indebtedness the incurrence by the Company or any of the Company to Restricted Subsidiaries of Indebtedness arising from the extent the net proceeds thereof are promptly deposited to defease honoring by a bank or satisfy the Notes pursuant to Article Eight other financial institution of a check, draft or Article Elevensimilar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five (5) Business Days;
(11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment or purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(12) Indebtedness representing installment insurance premiums of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters owing to insurance companies in the ordinary course of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if Indebtedness of the Company could incur $1.00 Issuers or any Restricted Subsidiary to the extent the proceeds of additional such Indebtedness pursuant are deposited and used to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtdefease the Notes as described under “Legal Defeasance and Covenant Defeasance” or “Satisfaction and Discharge”; and
(14) Indebtedness of the incurrence by the Company or any of the Restricted Subsidiary Subsidiaries of additional Indebtedness in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the an aggregate principal amount of all such Indebtedness outstanding (or accreted value, as applicable) at any one time in the aggregate shall outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14), not to exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets5.0 million.
(c) Neither Issuer shall incur, nor permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuers or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuers solely by virtue of being unsecured or by virtue of being secured on junior priority basis or junior in right of distribution of collateral proceeds.
(d) For purposes of determining compliance with this Section 4.074.09 and Section 4.12 hereof, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt described in clauses (1) through (14) of Section 4.074.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted (in its sole discretion maydiscretion) to classify such item of Indebtedness on the date of its incurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount Indebtedness, in any manner that complies with this covenant. The accrual of such Indebtedness as one of such types (interest or to divide such Indebtedness between two preferred stock or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes)Disqualified Stock dividends, the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any preferred stock or Disqualified Stock or Preferred Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.074.09 and Section 4.12; provided, in each such case, that the amount thereof as accrued shall be of any such accrual, accretion or payment is included as required in the calculation Consolidated Interest of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(he) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at a price less than the date of determination; and
(B) the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person so secured.
Appears in 2 contracts
Sources: Indenture (Radio One, Inc.), Indenture (Radio One, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Parent Guarantor will not, and will not cause or permit the Company or any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by the Company or a Restricted Subsidiary), unless such Indebtedness is incurred by the Parent Guarantor, the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the Companyreceipt and application of the proceeds therefrom, the Parent Guarantor’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Parent Guarantor, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (including any Exchange Notes but excluding any Additional NotesNotes and Exchanges Notes issued in exchange therefor) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Parent Guarantor, the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Parent Guarantor, the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Parent Guarantor, the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Parent Guarantor, the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of any Indebtedness of the Parent Guarantor, the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsParent Guarantor, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by Parent Guarantor, the Company or any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstanding at any time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, Indebtedness of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of Parent Guarantor, the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of Parent Guarantor, the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Parent Guarantor, the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses (2), (3), (1211) and this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Parent Guarantor, the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Parent Guarantor, the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Parent Guarantor, the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the CompanyParent Guarantor.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-U.S. dollar- equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Parent Guarantor, the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount For purposes of this Indenture, no Indebtedness issued at will be deemed to be subordinate or junior in right of payment to other Indebtedness solely by virtue of not having the benefit of a price less than Lien on assets, or guarantee of a Person, that benefits the amount other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the liability thereof shall be determined in accordance with GAAPother Indebtedness.
Appears in 2 contracts
Sources: Indenture (Laredo Petroleum Holdings, Inc.), Indenture (Laredo Petroleum, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt) and the Company will not issue any Disqualified Stock; provided, however, that the Company may incur Indebtedness or issue Disqualified Stock and a Subsidiary Guarantor may incur Acquired Debt and if the issuance ratio of Disqualified Stock), unless such Total Consolidated Indebtedness is incurred by the Company or any Guarantor and, in each case, to Adjusted Consolidated Operating Cash Flow for the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at less than or equal to 6.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.09 will not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Subsidiary Guarantor of Pari Passu Indebtedness in an aggregate principal amount (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (i), which does not exceed, as of the date of such incurrence, at any one time outstanding outstanding: (a) $500.0 million (all of which may be secured), plus (b) the amount (none of which may be secured) equal to 175% of the Net Cash Proceeds received by XM since immediately after the Issue Date from the issue or sale of Capital Stock of the Company or contributed to the capital of the Company (in each case other than proceeds of Disqualified Stock or sales of Capital Stock to the Company or any of its Subsidiaries) by Holdings from Net Cash Proceeds or received directly by the Company following a Parent Company Merger; provided, however, that, any Indebtedness incurred under this clause (1b) not after 2012 will have a Weighted Average Life to exceed Maturity that is greater than the greater then remaining Weighted Average Life to Maturity of the Notes; provided further, however, that any Net Cash Proceeds or cash contributions received by XM from the issue or sale of its Capital Stock and used to Incur Indebtedness pursuant to this clause (xb), will be excluded from the calculation of amounts under clause (iii)(b) $1,000.0 million and (y) of the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;covenant described under Section 4.07 hereof.
(2ii) unsecured subordinated Indebtedness or Disqualified Stock of the Company incurred to finance the construction, expansion, development or any Guarantor pursuant acquisition of music libraries and other recorded music programming, furniture, fixtures and equipment (including satellites, ground stations and related equipment) if such subordinated Indebtedness or Disqualified Stock, as applicable, has a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Notes (excluding any Additional Notes) and any Guarantee has a final Stated Maturity of principal later than the Stated Maturity of principal of the Notes;
(3iii) unsecured subordinated Indebtedness or Disqualified Stock of the Company in an aggregate principal amount (or liquidation preference, as applicable) (including the aggregate principal amount (or liquidation preference, as applicable) of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock, as applicable, incurred pursuant to this clause (iii)) at any time outstanding not to exceed the product of (a) $100.0 and (b) the number of Subscribers at such time if such subordinated Indebtedness or Disqualified Stock, as applicable, has a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Notes and has a final Stated Maturity of principal later than the Stated Maturity of principal of the Notes;
(iv) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness, including pursuant to the January 2003 Financing Transactions;
(v) the incurrence by the Company and any Subsidiary Guarantors of Indebtedness represented by the Notes and any Subsidiary Guarantees thereof and the Exchange Notes and any Subsidiary Guarantees thereof to be issued pursuant to the Registration Rights Agreement;
(vi) 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 acquisition, construction or improvement of property, plant or equipment used in the business of the Company or such Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Restricted Subsidiary outstanding on the Issue DateIndebtedness incurred pursuant to this clause (vi), and not otherwise referred to in this Section 4.07(b)exceed $100.0 million at any time outstanding;
(4vii) the incurrence by the Company or any Subsidiary Guarantors or any of its Restricted Subsidiaries, as applicable, of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clauses (i), (ii), (iii), (iv), (v), (vi), (vii), (xii), (xiii), (xiv) or (xv) of this paragraph;
(viii) 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 that: (a) if the Company is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes; and (b) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4viii);
(5ix) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred incurrence by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising Hedging Obligations incurred in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.4.09;
(fxi) For purposes of determining compliance with any dollar-denominated restriction on the incurrence by the Company or any Subsidiary Guarantor of additional Indebtedness denominated (including Acquired Debt) or Disqualified Stock in a foreign currency, the dollar-equivalent an aggregate principal amount of such (or liquidation preference or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock incurred pursuant thereto shall be calculated based on to this clause (xi), not to exceed $75.0 million;
(xii) Indebtedness the relevant currency exchange rate proceeds of which are utilized solely to finance working capital in effect an aggregate principal amount at any time outstanding not to exceed the lesser of (a) $50.0 million and (b) 80% of Qualified Receivables;
(xiii) from and after any Parent Company Merger, Indebtedness of Holdings in existence on the date that such Indebtedness was incurred.hereof;
(gxiv) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtednessany Qualified Sale and Leaseback Transaction, then the total amount deemed incurred pursuant to such Indebtedness including an XM-4 Sale and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.Leaseback Transaction; and
Appears in 2 contracts
Sources: Indenture (Xm Satellite Radio Holdings Inc), Indenture (Xm Satellite Radio Holdings Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock by the Company or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor Restricted Subsidiary and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.0 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Restricted Subsidiary (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater greatest of (x) $1,000.0 1,250.0 million and (y) the sum of $650.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness and (z) the Borrowing Base as of such date;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (excluding any Additional Notes) and any Guarantee of the Existing Senior Notes or the Notes (excluding any Guarantee of Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Restricted Subsidiary of any Indebtedness of the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness hereunder of the Company or any Restricted Subsidiary represented by Capital Finance Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76), together with any Permitted Refinancing Indebtedness incurred in respect thereof pursuant to clause (9) outstanding at any time shall below, not to exceed the greater of (x) $25.0 150.0 million and (y) 1.53.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Subsidiary; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (126), (11) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness of the Company or any Restricted Subsidiary consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness of the Company or any Restricted Subsidiary;
(12) Cash Management Obligations of the Company or any Restricted Subsidiary;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 200.0 million and (y) 3.04.0% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC 815), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as and to the extent required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount For purposes of this Indenture, no Indebtedness issued at will be deemed to be subordinate or junior in right of payment to other Indebtedness solely by virtue of not having the benefit of a price less than Lien on assets, or guarantee of a Person, that benefits the amount other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the liability thereof shall be determined in accordance with GAAPother Indebtedness.
Appears in 2 contracts
Sources: Indenture (Vital Energy, Inc.), Indenture (Vital Energy, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The For so long as the aggregate Principal Amount of all Notes then outstanding is greater than $10,000,000, the Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock)Debt) and, unless such Indebtedness is incurred by while the Company or any Guarantor and, in each casemay issue shares of preferred stock, the Company’s Consolidated Fixed Charge Coverage Ratio for Company shall not issue any Disqualified Stock and shall not permit any of its Subsidiaries to issue any shares of preferred stock. The provisions of the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding first paragraph of this Section 5.09 shall not prohibit the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of The incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater and its Subsidiaries of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible AssetsExisting Indebtedness;
(2ii) Indebtedness of The incurrence by the Company or any and the Guarantor pursuant to of Indebtedness represented by the Notes (excluding any Additional Notes) and any the Note Guarantee on the date of the Notesthis Indenture;
(3iii) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held incurrence by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
of (6x) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financingfinancing the purchase price or cost of equipment used in the production lines of the Company or any of its Subsidiaries (other than any sale-leaseback transaction involving any such equipment owned by the Company or any of its Subsidiaries on the date hereof) and (y) additional Indebtedness represented by Capital Lease Obligations, refinancingmortgage financings or purchase money obligations, renewingin each case, defeasing or refunding incurred for the purpose of financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development of property equipment used in the business Permitted Business (other than as described in clause (x)) of the Company or any of its Subsidiaries; provided that , in the case of clause (y), in an aggregate principal amount (together with all Indebtedness incurred pursuant to Section 5.09(xiii) and any Permitted Refinancing Indebtedness incurred pursuant to Section 5.09(iv) to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to Section 5.09(iii)(y) or Section 5.09(xiii)) not to exceed $25.0 million in the aggregate outstanding at any time outstanding;
(iv) the incurrence by the Company or any Restricted Subsidiary of its 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 that was permitted by this Indenture to be incurred pursuant to clauses (i), (iii), (viii) or (xiii) of this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedSection 5.09;
(8) Indebtedness of v) the incurrence by the Company or any Restricted Subsidiary under of its Subsidiaries of Indebtedness not to exceed in the aggregate at any time outstanding $5.0 million; provided, however, that (a) one or more standby letters such Indebtedness is expressly subordinated to the prior payment in full in cash of credit issued all Obligations with respect to this Indenture, the Notes and the Note Guarantee, (b) such Indebtedness matures no less than 181 days following the maturity of the Notes;
(vi) the incurrence by or for the account of the Company or a Restricted Subsidiary any of its Subsidiaries of Hedging Obligations in the ordinary course of business and (bother than for speculative purposes);
(vii) other letters the incurrence by the Company or any of creditits Subsidiaries of Indebtedness in respect of workers’ compensation claims, surety, bid, performance, appeal or similar bondsself insurance obligations, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) performance and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising surety bonds in the ordinary course of business;
(10viii) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of incurrence by the Company or any Restricted Subsidiary of its Subsidiaries of unsecured Indebtedness not to exceed in the aggregate at any time outstanding (together with any outstanding Permitted Refinancing Indebtedness incurred pursuant to Section 5.09(iv) to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 5.09(viii)) $25.0 million;
(ix) Guarantees by the Company or any of its Subsidiaries of Indebtedness otherwise permitted by this Section 5.09;
(x) the incurrence of Indebtedness by the Company or any of its Subsidiaries arising from agreements providing for indemnification or indemnification, contribution, earnout, adjustment of purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryotherwise permitted under this Indenture;
(12xi) the incurrence of intercompany Indebtedness among the Company and any of its Subsidiaries;
(xii) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; and
(xiii) the incurrence by the Company or any of its Subsidiaries of Secured Funded Indebtedness so long as either (x) the aggregate at any time outstanding, together with any outstanding secured Indebtedness incurred under Section 5.09(iii)(y) (but excluding any outstanding secured Indebtedness incurred under Section 5.09(iii)(x)) and any secured Permitted Refinancing Indebtedness incurred pursuant to Section 5.09(iv) to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to Section 5.09(iii)(y) or Section 5.09(xiii) (but excluding any secured Permitted Refinancing Indebtedness incurred pursuant to 5.09(iv) to renew, refund, refinance, replace, defease or discharge any Indebtedness pursuant to Section 5.09(iii)(x)) does not exceed $25.0 million or (y) the Company enters into a pledge and security agreement with a collateral agent and takes such other actions as are necessary in order to cause all payments due under this Indenture, the Notes and the Note Guarantee to be secured on an equal and ratable (or senior) basis with the Obligations so secured by such Lien securing the Secured Funded Indebtedness until such time as such Secured Funded Indebtedness is no longer secured by a Lien. The Company will not incur, and will not permit the Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) other Indebtedness of the Company solely by virtue of being unsecured or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings by virtue of being secured on a first or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) junior Lien basis. For purposes of determining compliance with this Section 4.07Section, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by this Section 4.07Permitted Debt set forth above, the Company in will be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual covenant. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock terms will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; providedcovenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount; and
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then in the total amount deemed incurred pursuant to such Indebtedness and such letter case of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditany other Indebtedness.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 2 contracts
Sources: Indenture (Akoustis, Inc.), Indenture (Akoustis Technologies, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) under one or more Credit Facilities Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed at any time outstanding the greater of of: (x) $1,000.0 million 200,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness in accordance with Section 4.10 hereof and (y) an amount that does not cause the sum First Lien Leverage Ratio of $650.0 million and 25.0% the Company to exceed 2.75 to 1.00 determined on a pro forma basis (including the pro forma application of Adjusted Consolidated Net Tangible Assetsthe net proceeds therefrom);
(2b) First Lien Notes and other Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred Date after giving effect to in this Section 4.07(b)the Permitted Closing Steps;
(4c) Hedging Obligations;
(d) Indebtedness represented by the Original Notes, or the Subsidiary Guarantees with respect to the Original Notes, and any Additional Notes issued in respect to any of the foregoing (including as PIK Interest thereon) in accordance with the terms hereof;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed at any time shall not exceed the greater of (x) outstanding $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed25,000,000;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), defease, (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 2% of the Company’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding;
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding and any guarantee thereof;
(m) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2m)), (3)collectively, (12) and (13) of this Section 4.07(b)in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(13n) if Acquired Indebtedness of a Subsidiary of the Company acquired after the Issue Date or a person merged into or consolidated with any member the Company or a Restricted Subsidiary after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Company could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrenceacquisition or other transaction;
(o) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(p) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(q) other than Indebtedness incurred pursuant to clauses (a), Acquired Debt(b), (d), (o) or (p) of the second paragraph of this Section 4.09, Indebtedness incurred in connection with the Permitted Closing Steps;
(r) a Capital Lease Obligation in connection with a Galileo Transaction; and
(14s) any vessel charter being treated as a finance or capital lease under IFRS; provided that if the Company or any Guarantor is an obligor with respect to any unsecured Indebtedness incurred under Credit Facilities pursuant to clauses (a), (l), (m)(i) or (n) of the second paragraph of this Section 4.09, then such Indebtedness must be expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as applicable. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 2 contracts
Sources: Indenture (CGG), Indenture (CGG Marine B.V.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes, the Concurrently-Issued Senior Notes or the Notes (excluding any Additional Notes) and any Guarantee of the Existing Senior Notes, the Concurrently-Issued Senior Notes or the Notes (excluding any Guarantee of Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of by the Company or any Guarantor of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) any Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant is permitted to Interest Rate Agreements, but only to be incurred under the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted BusinessIndenture;
(76) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight Seven or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article ElevenTen;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (1211) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-U.S. dollar denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-U.S. dollar equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount For purposes of the liability thereof shall Indenture, no Indebtedness will be determined deemed to be subordinate or junior in accordance with GAAPright of payment to other Indebtedness solely by virtue of not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the other Indebtedness.
Appears in 2 contracts
Sources: Third Supplemental Indenture (Laredo Petroleum, Inc.), Fourth Supplemental Indenture (Laredo Petroleum, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectivelyin any such case, “incur”), ) any Indebtedness (including Acquired Indebtedness) or (ii) issue any Acquired Debt and the issuance of Disqualified Stock); provided, unless such however, that the Issuer and any of its Restricted Subsidiaries may incur Indebtedness is incurred by the Company (including Acquired Indebtedness) or any Guarantor and, in each caseissue Disqualified Stock if immediately after and giving effect thereto, the Company’s Consolidated Fixed Charge Coverage Ratio for the Issuer’s most recently-recently ended four full fiscal quarters for which internal annual or quarterly financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or Disqualified Stock issued would have been not less than 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock issued at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding Section 5.11(a) will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) the incurrence by the Issuer of Indebtedness represented by the Notes issued on the Issue Date and the incurrence by any Guarantor of a Note Guarantee (including, but not limited to, the Company Note Guarantees issued on the Issue Date);
(ii) the incurrence by the Issuer or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Restricted Subsidiary of Lease Liabilities in an aggregate principal amount that, at any one the time outstanding of and after giving effect to such incurrence and all other incurrences made under this clause Section 5.11(b)(ii) since the Issue Date and which remain outstanding (1) including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Lease Liabilities incurred pursuant to this Section 5.11(b)(ii)), does not to exceed the greater of (xA) $1,000.0 50 million and (yB) the sum of $650.0 million and 25.015% of Adjusted Consolidated Net Tangible AssetsAssets (determined as of the date of such incurrence and including any right of use assets acquired in connection with such Lease Liabilities);
(2iii) Indebtedness of the Company or any Guarantor pursuant to incurrence by the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company Issuer or any Restricted Subsidiary outstanding on of Lease Liabilities in the ordinary course of business in respect of office space;
(iv) the incurrence by the Issuer or any Restricted Subsidiary of Purchase Money Obligations incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, development or improvement of property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount that, at the time of and after giving effect to such incurrence and all other incurrences made under this Section 5.11(b)(iv) since the Issue DateDate and which remain outstanding (including all Permitted Refinancing Indebtedness incurred to refund, and not otherwise referred refinance or replace any Indebtedness incurred pursuant to in this Section 4.07(b5.11(b)(iv)), does not exceed the greater of (A) $10.0 million and (B) 5% of Consolidated Net Tangible Assets (determined as of the date of such incurrence and including any assets acquired with such Indebtedness);
(4v) the incurrence by the Issuer or any of its Restricted Subsidiaries of the Existing Indebtedness;
(vi) the incurrence by the Issuer 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 between or among the Company Issuer and any of its Restricted Subsidiaries) that was incurred in reliance on Section 5.11(a) or clauses (i), (ii), (iv), (v), (xiii), (xvii) or this clause (vi) of this Section 5.11(b);
(vii) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted Subsidiaries; provided, however, that (iA) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary thereof of the Issuer and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary thereofof the Issuer, shall be deemedwill, in each case, be deemed to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4vii);
(5viii) guarantees the issuance of Disqualified Stock by any Restricted Subsidiary of the Issuer to the Issuer or to any other Restricted Subsidiary of the Issuer; provided, however, that
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer and (B) any sale or other transfer of any Indebtedness such Disqualified Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Company or any Issuer, will, in each case, be deemed to constitute an issuance of its such Disqualified Stock by such Restricted Subsidiaries which is Subsidiary that was not permitted to be incurred under by this Indentureclause (viii));
(6ix) Indebtedness of the Company incurrence by the Issuer or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;Hedging Obligations
(7A) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) not for speculative purposes and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditB) as required by Section 5.17;
(9x) the guarantee by the Issuer or any Guarantor of Indebtedness of the Issuer or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 5.11; provided that if the Indebtedness being guaranteed is subordinated in right of payment to or pari passu in right of payment with the Notes or any of the Note Guarantees, then the guarantee must be subordinated in right of payment or pari passu in right of payment to at least the same extent as the Indebtedness guaranteed;
(xi) Indebtedness of the Company Issuer or any Restricted Subsidiary with respect to obligations relating to oil arising (A) from the honouring by a bank or gas balancing positions arising other financial institution of a cheque, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify business or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 2 contracts
Sources: Trust Indenture, Trust Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock.
(a) The Company will Issuer shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createIncur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”)indirectly, any Indebtedness (including Indebtedness, other than Permitted Indebtedness, or to issue any Acquired Debt and the issuance of Disqualified Stock); provided, unless such however, that the Issuer and any of its Restricted Subsidiaries may incur Indebtedness is incurred by or issue Disqualified Stock if (i) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Incurred or such Restricted SubsidiaryDisqualified Stock is issued, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted would have been at least 2.0 to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements1.0, but only to the extent such obligations do not, determined on a net basis, exceed 105% pro forma basis (including a pro forma application of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy therefrom), as if the Notes pursuant to Article Eight or Article Eleven;
(11) additional Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, had been Incurred or the net proceeds Disqualified Stock had been issued, as the case may be, at the beginning of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) such four-quarter period; and (13ii) no Default or Event of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 Default shall have occurred and be continuing immediately after and after giving effect to such incurrencethe Incurrence or issuance, Acquired Debt; andas the case may be.
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(cb) For purposes of determining compliance with this Section 4.07, 5.11(a):
(i) in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Permitted Indebtedness permitted by this or is entitled to be Incurred pursuant to Section 4.075.11(a), the Company Issuer may, in its sole discretion maydiscretion, at any time, divide and classify or(or later reclassify in whole or in part, from time to time, reclassify all or any portion of in its sole discretion) such item of Indebtedness and only in any manner that complies with this Section 5.11. For avoidance of doubt, Indebtedness may be required classified as Incurred in part pursuant to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two the clauses of the definition of “Permitted Indebtedness”, and in part under one or more of such typesclauses or under Section 5.11(a); provided that Indebtedness under a Credit Facility which was incurred on ;
(ii) Guarantees of, or prior obligations in respect of letters of credit relating to, and outstanding on Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(after giving effect iii) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the application amount of proceeds the liability in respect thereof determined in accordance with GAAP;
(iv) Indebtedness of Notes), any Person existing at the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.Incurred by the Issuer and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary;
(dv) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual the accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence a Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.075.11; providedprovided that, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued accrued; and
(vi) if any Indebtedness is Incurred in a currency other than U.S. dollars (the “Other Currency”), the U.S. dollar equivalent thereof for all purposes under this Indenture shall be included as required in determined by reference to the calculation U.S. dollar/Other Currency exchange rate on the Business Day immediately preceding the date of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount Incurrence of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency noon rate of exchange rate in effect on between the date that such Indebtedness was incurred.
(g) If Indebtedness is secured U.S. dollar and the Other Currency as quoted by a letter the Bank of credit that serves only to secure such IndebtednessCanada. Notwithstanding any other provision of this Section 5.11, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Issuer or any of its Restricted Subsidiaries may Incur pursuant to this Section 5.11 shall not be deemed to be exceeded solely as a price less than result of subsequent changes in the amount of the liability thereof shall be determined in accordance with GAAPexchange rate.
Appears in 2 contracts
Sources: Trust Indenture, Trust Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “"incur”"), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s 's Consolidated Fixed Charge Interest Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12.0:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “"Permitted Debt”"):
(1) Indebtedness of the Company or and of any Guarantors (whether as borrowers or guarantors) Restricted Subsidiary under one or more a Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $400 million, which amount shall be permanently reduced by the greater amount of (x) Net Available Cash from Asset Sales applied by the Company or any Restricted Subsidiary thereof to permanently repay any such Indebtedness; provided that no more than $1,000.0 100 million and (y) of the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsborrowings under such Credit Facility can be directly borrowed or guaranteed by Subsidiaries that are not Guarantors;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesNotes and any notes (including Guarantees thereof) issued in exchange for the Notes pursuant to the Registration Rights Agreement;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of "Permitted Debt;"
(4) Indebtedness of the Company or any Guarantor pursuant to the Convertible Senior Subordinated Debentures outstanding on the date of the Issue Date, and any amount of Indebtedness issued pursuant to an over-allotment option with respect to the Convertible Senior Subordinated Debentures;
(45) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness and the obligee is a Foreign Subsidiary, such Indebtedness must be subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, pursuant to an intercompany note in the form of Exhibit G hereto or pursuant to another agreement containing substantially the same subordination provisions as those contained in Section 2.01 of Exhibit G hereto; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a pledge under a Credit Facility pursuant to a Permitted Lien) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (45);
(56) guarantees of any Guarantor of Indebtedness of the Company or any of its Restricted Subsidiaries the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, not exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; ;
(b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and ; (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business and not for speculative purposes; and (d) any guarantee of any of the purpose of mitigating against risks encountered in a Permitted Businessforegoing;
(7) 8) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) 8) not to exceed $30.0 million outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assetstime; provided further that the principal amount of any Indebtedness permitted under this clause (7) 8) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in accordance with the definition of such termgood faith, of the acquired or constructed asset or improvement so financed;
(8) 9) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business consistent with past practice and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ ' acceptances, completion guarantees or similar instrumentsinstruments pursuant to self-insurance and workers' compensation obligations; provided that, in each case contemplated by this clause (8)9), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawingdrawing and which obligations may be reimbursed through borrowings of Indebtedness permitted pursuant to this Section 4.07; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary Subsidiary; provided that the maximum assumable liability in respect of all such obligations shall at no time exceed the gross proceeds actually paid or a Person that, contemporaneously with such acquisition or disposition, becomes a received by the Company and any Restricted Subsidiary, including the Fair Market Value of non-cash proceeds;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (133) of this Section 4.07(b)paragraph (b) of this definition of "Permitted Debt;" and
(13) if Indebtedness owed to third party financing companies in the form of limited recourse obligations that finance receivables of customers of the Company could incur $1.00 or any Restricted Subsidiary in the ordinary course of additional business; provided that such Indebtedness is limited in an amount not in excess of 75% of such obligations in the aggregate of the total owed by customers of the Company or any Restricted Subsidiary to such third party financing companies;
(14) Indebtedness with respect to Standard Receivables Undertakings;
(15) Indebtedness incurred by a Foreign Subsidiary, which may but is not required to be incurred under the Senior Credit Facilities, which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to paragraph this clause (a15) and then outstanding, does not exceed 25% of this Section 4.07 after giving effect Consolidated Assets of the Foreign Subsidiaries; provided that at the time of the incurrence of any such Indebtedness the Company's Consolidated Interest Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to such incurrence, Acquired Debtor greater than 2.0:1; and
(1416) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (1315) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed $35.0 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Senior Credit Facility Facilities which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), is in existence following the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (1) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 above rather than paragraph (a) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Interest Coverage Ratio of the Company.
(f) For purposes of determining compliance with of any non-U.S. dollar-denominated restriction on Indebtedness with this Section 4.07, the incurrence amount outstanding under any U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto currency shall at all times be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of the term Indebtedness, or first committed, in the cases of the revolving credit Indebtedness, provided, however, that if such Indebtedness is incurred to refinance other Indebtedness denominated in the same or different 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 the principal amount of such indebtedness being refinanced.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Invacare Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries toshall not, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “"incur”)" and, correlatively, "incurred" and "incurrence") any Indebtedness (including including, without limitation, Acquired Debt) or (ii) issue any Disqualified Stock; provided, however, that the Company and/or any of its Restricted Subsidiaries may incur Indebtedness (including, without limitation, Acquired Debt and the issuance Debt) or issue shares of Disqualified Stock)Stock if, unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding after giving effect to the incurrence of such Indebtedness taken or the issuance of such Disqualified Stock, the Consolidated Cash Flow Leverage Ratio for the Company, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as one if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued at the beginning of the period used to calculate the Consolidated Cash Flow Leverage Ratio, does not exceed 6.0 to 1. If the Company incurs any Indebtedness or issues or redeems any Preferred Stock subsequent to the commencement of the period for which such ratio is being calculated but prior to the event for which the calculation of the ratio is made, then the ratio will be calculated giving pro forma effect to any such incurrence of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at least equal the beginning of the applicable period. In making such calculation on a pro forma basis, interest attributable to or greater than 2.25:1Indebtedness bearing a floating interest rate shall be computed as if the rate in effect on the date of computation had been the applicable rate for the entire period.
(b) Notwithstanding the foregoing, the Company and, The foregoing limitation in Section 4.09(a) shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur (with each and all of the following (collectively, the “Permitted Debt”exception to be given independent effect):
(1i) Indebtedness of the incurrence by the Company or and/or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not with letters of credit being deemed to exceed have a principal amount equal to the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness maximum potential liability of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or and/or any of its Restricted Subsidiaries which is permitted under the letters of credit) not to be incurred under this Indentureexceed $150.0 million in the aggregate at any one time outstanding, less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce the commitments with respect to such Indebtedness pursuant to Section 4.10 hereof;
(6ii) the incurrence by the Company and/or any of its Restricted Subsidiaries of Vendor Indebtedness, provided that the aggregate amount of such Vendor Indebtedness incurred does not exceed 100% of the total cost of the Telecommunications Related Assets financed with Vendor Indebtedness;
(iii) the incurrence by the Company or and/or any of its Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Company and/or any of its Restricted Subsidiary that constitutes Subsidiaries of Indebtedness in an aggregate amount not to exceed $25.0 million at any one time outstanding;
(av) obligations pursuant to Interest Rate Agreementsthe incurrence by the Company of Indebtedness, but only to the extent such obligations do not, on the Indebtedness has a net basis, exceed 105% final maturity no earlier than the final maturity of the Notes and a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Notes, in an aggregate principal amount not to exceed 2.0 times the sum of the Indebtedness covered net cash proceeds received by such Interest Rate Agreements; (b) obligations under currency exchange contracts the Company after January 1, 2000 from the issuance and related hedging arrangements entered sale of Equity Interests of the Company, other than Disqualified Stock, or the issuance and sale of debt securities or Disqualified Stock of the Company that have been converted into Equity Interests, in each case, other than Equity Interests or convertible debt securities sold to a Restricted Subsidiary, plus the ordinary course fair market value of businessEquity Interests, other than Disqualified Stock, or the issuance and (c) obligations pursuant to hedging arrangements (includingsale of debt securities or Disqualified Stock of the Company that have been converted into Equity Interests, without limitationissued after January 1, swaps, caps, floors, collars, options and similar agreements) entered into 2000 in the ordinary course connection with an acquisition of business for the purpose of mitigating against risks encountered in a Permitted BusinessTelecommunications Business or Telecommunications Related Assets;
(7vi) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations incurrence (whether or not incurred pursuant to sale and leaseback transactionsa "Permitted Refinancing") or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or and/or any of its Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater Subsidiaries of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renewrefinance, extend, substitute, defease, refund, refinance or replace, any Indebtednessrefund or defease ("Refinance" and correlatively, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; "Refinanced" and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (MGC Communications Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createdirectly or indirectly, create incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including any Acquired Debt and the issuance Company shall not issue any Disqualified Stock and shall not permit any of Disqualified Stock), unless such Indebtedness is incurred by its Restricted Subsidiaries to issue any shares of preferred stock to any person other than the Company or any Guarantor and, in each case, a Wholly-Owned Restricted Subsidiary of the Company’s Consolidated ; provided, however, that the Company and the Subsidiary Guarantors may incur Indebtedness or issue shares of Disqualified Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, "Permitted Indebtedness"): (a) the “Permitted Debt”):
Indebtedness evidenced by the Notes; (1b) Indebtedness of the incurrence by the Company or any Guarantors (whether of its Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so long as borrowers or guarantors) under one or more Credit Facilities in an the aggregate principal amount of all Indebtedness outstanding under all Credit Facilities does not, at any one time outstanding under this clause (1) not to time, exceed the greater of (x1) $1,000.0 300.0 million and (y2) the sum Borrowing Base, provided that the Company may incur more than $300 million of $650.0 million and 25.0% Indebtedness pursuant to Credit Facilities only if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available would have been at least 2.0 to 1, determined on a pro forma basis as set forth in the definition of Adjusted Consolidated Net Tangible Assets;
Fixed Charge Coverage Ratio; (2c) the guarantee by any Subsidiary Guarantor of any Indebtedness that is permitted by this Indenture to be incurred by the Company; (d) all Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee its Restricted Subsidiaries in existence as of the Notes;
date of this Indenture; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that if the Company is the obligor on such Indebtedness, (i) such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause ; (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guarantees, performance bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9) Indebtedness of the Company other than advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of business;
business and on terms and conditions which are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit guarantee or performance bond itself), not to exceed in the aggregate at any given time 5.0% of Total Assets; (10g) Indebtedness under Interest Rate Hedging Agreements entered into for the purpose of limiting interest rate risks, provided that the obligations under such agreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant and that the aggregate notional principal amount of such agreements does not exceed 105% of the principal amount of the Indebtedness to which such agreements relate; (h) Indebtedness under Oil and Gas Hedging Contracts, provided that such contracts were entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries; (i) the incurrence by the Company of Indebtedness not otherwise permitted to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes be incurred pursuant to Article Eight or Article Eleven;
(11) this paragraph, provided that the aggregate principal amount of all Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary incurred pursuant to such an agreementthis clause (i), together with all Permitted Refinancing Debt incurred pursuant to clause (j) of this paragraph in each case respect of Indebtedness previously incurred or assumed in connection with the acquisition or disposition of pursuant to this clause (i), does not exceed $15.0 million at any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
one time outstanding; (12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued Debt incurred in exchange for, or the net proceeds of which are used to renewrefinance, extend, substituterenew, defeasereplace, defease or refund, refinance or replace, any Indebtedness, Indebtedness that was permitted by this Indenture to be incurred (including any Disqualified Stock, Indebtedness previously incurred pursuant to paragraph this clause (a) of this Section 4.07 and j), but excluding Indebtedness under clauses (2b), (3c), (12e), (f), (g), (h), (k), (l) and (13m)); (k) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted Subsidiary in addition to the ordinary course of business in connection with the obtaining of goods or services; (l) Indebtedness consisting of obligations in respect of purchase price adjustments, guarantees or indemnities in connection with the acquisition or disposition of assets; and (m) production imbalances that described in clauses (1) through (13) abovedo not, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in outstanding, exceed 2% of the aggregate Total Assets of the Company. The Company shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07permit any Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07however, the Company in its sole discretion may, at if any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of ceases to be Non-Recourse Debt, such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, event shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be constitute an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of by the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Canton Oil & Gas Co)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Except as provided in clause (b) of this Section 6.01 the Borrower shall not, and will shall not cause or permit any of its Restricted Material Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance of Borrower shall not issue any Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, Clause (a) of this Section 6.01 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the Company incurrence by the Borrower or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Material Subsidiary of unsecured Indebtedness in an aggregate principal amount at (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any one time outstanding under Indebtedness incurred pursuant to this clause (1i)) which does not exceed, as of the date of such incurrence, at any time outstanding $250,000,000; provided that such Indebtedness shall have (A) a final Stated Maturity of principal at least six months later than the Maturity Date (or, in the case of a letter of credit, an expiry date at least six months later than the Maturity Date) and (B) a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans; provided, further that no draw under a letter of credit by the beneficiary thereof (and resulting reimbursement obligation of the Borrower or any of its Material Subsidiaries in respect thereof) prior to such date shall be considered a violation of the requirement set forth in this clause (i) regarding the final Stated Maturity thereof;
(ii) unsecured subordinated Indebtedness or Disqualified Stock of the Borrower in an aggregate principal amount (or liquidation preference, as applicable) (including the aggregate principal amount (or liquidation preference, as applicable) of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock, as applicable, incurred pursuant to this subclause (iii)) at any time outstanding not to exceed the greater product of (a) $100.00 and (b) the number of Subscribers at such time; provided that such subordinated Indebtedness or Disqualified Stock, as applicable, shall have a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans and a final Stated Maturity of principal at least six months later than the Maturity Date;
(iii) the incurrence by the Borrower and its Material Subsidiaries of (x) $1,000.0 million the Existing Indebtedness, including pursuant to the January 2003 Financing Transactions (other than the borrowings described in clause (c) of the definition thereof) and (y) Indebtedness under the sum of Distribution and Credit Agreement in an aggregate principal amount not to exceed $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets150,000,000;
(2iv) the incurrence by the Borrower and any Subsidiary Loan Party of Indebtedness of represented by the Company or Senior Fixed Rate Notes and any Guarantor Guarantees thereof and any exchange notes and Guarantees thereof to be issued pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesRegistration Rights Agreement;
(3v) Indebtedness the incurrence by the Borrower and any Subsidiary Loan Party of the Company Indebtedness pursuant to the Existing XM Facilities;
(vi) the incurrence by the Borrower or any Restricted Subsidiary outstanding on Loan Party, or Material Subsidiary as applicable, of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace, Indebtedness (other than intercompany Indebtedness or the Existing 10% Notes) that was permitted to in be incurred under subclauses (i), (ii), (iii), (iv), (v), (xi), (xii), (xiii) or (xvii) of this Section 4.07(bclause (b);
(4vii) the incurrence by the Borrower or any Material Subsidiary of intercompany Indebtedness between or among the Company Borrower and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(iA) if the Borrower or any Material Subsidiary is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Borrower Obligations and Guarantor Obligations; and
(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Borrower or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Borrower or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or such Restricted Material Subsidiary, as the case may be, that was not permitted by this clause subclause (4vii);
(5viii) guarantees of any Indebtedness of the Company incurrence by the Borrower or any Material Subsidiary of its Restricted Subsidiaries which is Hedging Obligations directly related to Indebtedness permitted to be incurred under this IndentureAgreement;
(6ix) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.076.01;
(x) the incurrence by the Borrower of unsecured subordinated Indebtedness or Disqualified Stock in an aggregate principal amount not to exceed $250,000,000 at any time outstanding the proceeds of which are used to finance the construction, expansion, development or acquisition of music libraries and other recorded music programming, furniture, fixtures and equipment (including satellites, ground stations and related equipment); provided that such subordinated Indebtedness or Disqualified Stock, as applicable, shall have a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans and a final Stated Maturity of principal at least six months later than the Maturity Date;
(xi) from and after any Parent Company Merger, Borrower-SIRIUS Merger or, prior to the Holdings Covenant and Collateral Release Notice, a XM-SIRIUS Merger Indebtedness of Holdings or SIRIUS, as the case may be, that become Indebtedness of the Borrower as a result thereof;
(xii) a single Qualified Sale and Leaseback Transaction, and any Permitted Beneficial Interest Indebtedness;
(xiii) Satellite Vendor Indebtedness;
(xiv) any Indebtedness incurred hereunder and the Guarantee of such Indebtedness;
(xv) the incurrence by the Borrower of one or more MLB Letters of Credit in an aggregate face amount not to exceed $120,000,000 at any time for all such MLB Letters of Credit if such MLB Letters of Credit are not drawn upon, or, if and to the extent drawn upon, such drawing is not reimbursed within ten Business Days following payment on such MLB Letters of Credit;
(xvi) [Reserved]
(xvii) the incurrence by the Borrower or any Material Subsidiary of unsecured Indebtedness undertaken in connection with the Merger or any Merger Related Event (including without limitation in connection with a change of control offer to security holders of the Borrower, any Material Subsidiary or Holdings, a change of control offer in connection with an XM-4 Sale and Leaseback Transaction or a waiver of any such change of control offer or right to receive the same), other than or in addition to Permitted Refinancing Indebtedness incurred for such purpose, in an aggregate principal amount (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xvii)) which does not exceed, as of the date of such incurrence, at any time outstanding $100,000,000; provided that such Indebtedness shall have a final Stated Maturity of principal at least six months later than the Maturity Date and a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans; and
(xviii) the incurrence by Holdings and any Subsidiary Loan Party of unsecured Indebtedness represented by unsecured Guarantees of the XM Escrow Senior Notes; provided, in each such casehowever, that the amount thereof as accrued such unsecured Guarantees shall be included as required in form and substance reasonably satisfactory to the calculation of the Consolidated Fixed Charge Coverage Ratio of the CompanyAdministrative Agent.
(fc) The Borrower shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Credit Agreement Obligations on substantially identical terms; provided, however, that no Indebtedness of the Borrower shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower solely by virtue of being unsecured. For purposes of determining compliance with any dollar-denominated restriction on this Section 6.01, in the incurrence event that an item of Indebtedness denominated meets the criteria of more than one of the categories of Permitted Debt described in a foreign currencyclauses (i) through (xiv) above, the dollar-equivalent principal amount Borrower may, in its sole discretion, classify (and later reclassify) such item of Indebtedness in any manner that complies with this Section, and such item of Indebtedness incurred pursuant thereto shall will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed treated as having been incurred pursuant to only one of such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditclauses.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt Indebtedness and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur on or after the Acquisition Closing Date each and all of the following (collectively, the “Permitted DebtIndebtedness”):
(1) Indebtedness of the Company or any ▇▇▇▇▇ ▇▇▇▇▇ GP (and guarantees by Guarantors (whether as borrowers or guarantorsof such Indebtedness) under one the Credit Agreement or more Credit Facilities the Term Loan in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (xi) $1,000.0 405.0 million and (ii) $155.0 million plus (x) 85% of accounts receivable of the Company and its Restricted Subsidiaries as of the end of the most recently ended fiscal quarter for which consolidated financial statements are available, plus (y) the sum of $650.0 million and 25.080% of Adjusted Consolidated Net Tangible Assetsinventory of the Company and its Restricted Subsidiaries as of the end of the most recently ended fiscal quarter for which consolidated financial statements are available, less, in the case of clause (i) and clause (ii), without duplication, the amount of any permanent repayments thereof or permanent reductions in commitments thereunder from the proceeds of one or more Asset Sales which are used to prepay or repay the Credit Agreement or the Term Loan, as the case may be, pursuant to clause (b)(i) of Section 4.11 hereof;
(2) Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor pursuant to (a) the Notes (excluding any Additional Notes) and any Guarantee of the Notes (excluding any Additional Notes), and (b) any Exchange Notes issued in exchange for the Notes (excluding any Additional Notes) pursuant to the Registration Rights Agreement and any Guarantee of the Exchange Notes;
(3) Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Restricted Subsidiary Guarantor outstanding on the Issue Date, Acquisition Closing Date and not otherwise referred to in this Section 4.07(b)definition of “Permitted Indebtedness;”
(4) 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 that:
(a) if the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company or ▇▇▇▇▇ ▇▇▇▇▇ GP, or the Guarantee, in the case of a Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale disposition, pledge or other transfer of any such Indebtedness to a Person that is not either (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary thereofor a disposition, pledge or transfer under the Credit Agreement or Term Loan) of any such Indebtedness, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Guarantor or ▇▇▇▇▇ ▇▇▇▇▇ GP of Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any of its Restricted Subsidiaries the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness obligations of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP, or any Restricted Subsidiary that constitutes Guarantor not entered into for speculative purposes
(a) obligations pursuant to Interest Rate AgreementsAgreements designed to manage interest rates in respect of Indebtedness of the Company, but only to ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor as long as the extent notional amounts of such obligations do not, on a net basis, not exceed 105% of the aggregate principal amount of the such Indebtedness covered by such Interest Rate Agreements; then outstanding,
(b) obligations under currency exchange contracts and related hedging arrangements entered into in any Currency Hedging Agreements, relating to (1) Indebtedness of the ordinary course of businessCompany, and ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor and/or (c2) obligations pursuant to hedging arrangements (includingpurchase or sell assets or properties, without limitationin each case, swaps, caps, floors, collars, options and similar agreements) entered into incurred in the ordinary course of business for of the purpose Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor; provided, however, that such Currency Hedging Agreements do not increase the Indebtedness or other obligations of mitigating against risks encountered the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder or
(c) under any Commodity Price Agreements which do not increase the amount of Indebtedness or other obligations of the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Guarantor outstanding other than as a Permitted Businessresult of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable thereunder;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at ), together with any time shall Refinancing Indebtedness incurred in respect thereof, not to exceed the greater of (x) $25.0 15 million and (y) 1.56% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of , outstanding at any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedtime;
(8) Indebtedness of the Company or any Restricted Subsidiary under arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (aexcept in the case of daylight overdrafts) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary drawn against insufficient funds in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawingbusiness; provided, furtherhowever, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditextinguished within five Business Days after incurrence;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to as described below under Article Eight or Article ElevenTwelve hereof;
(1110) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary Subsidiary; provided that the maximum assumable liability in respect of all such obligations shall at no time exceed the gross proceeds actually paid or a Person that, contemporaneously with such acquisition or disposition, becomes a received by the Company and any Restricted Subsidiary, including the Fair Market Value of non-cash proceeds;
(1211) Permitted any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, “Refinancing Indebtedness Indebtedness”) of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), ) and (3)) of this paragraph (b) of this definition of “Permitted Indebtedness,” including any successive refinancings so long as the borrower under such refinancing is the Company (which may be a borrower together with ▇▇▇▇▇ ▇▇▇▇▇ GP or one or more co-obligors which are also Guarantors) or, if not the Company, one or more Guarantors or ▇▇▇▇▇ ▇▇▇▇▇ GP if the Indebtedness being refinanced is of a Guarantor or ▇▇▇▇▇ ▇▇▇▇▇ GP, and the aggregate principal amount of Indebtedness represented thereby (or if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness plus any accreted value attributable thereto since the original issuance of such Indebtedness) is not increased by such refinancing plus the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing and (1) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, such new Indebtedness is made subordinated in right of payment to the Notes or Guarantee, as the case may be, at least to the same extent as the Indebtedness being refinanced and (2) in the case of Pari Passu Indebtedness or Subordinated Indebtedness, as the case may be, such refinancing does not reduce the Average Life to Stated Maturity or the Stated Maturity of such Indebtedness or has a Stated Maturity later than that of the Notes;
(12) Indebtedness in respect of bid, performance, surety bonds and workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations of the Company or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance, surety bonds and workers’ compensation claims, self-insurance obligations and bankers acceptances; provided that, in each case contemplated by this clause (13) 12), upon the drawing of this Section 4.07(b)such instrument, such obligations are reimbursed within 30 days following such drawing;
(13) Acquired Indebtedness, if (x) the Company could incur $1.00 Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available after giving pro forma effect to the relevant acquisition and incurrence of such Acquired Indebtedness as of the beginning of such four quarter period would be not less than (y) the Company’s Consolidated Fixed Charge Coverage Ratio for such four quarter period as of immediately prior to such acquisition and incurrence of such Acquired Indebtedness, and any refundings or refinancings of such Acquired Indebtedness, including additional Indebtedness pursuant incurred to paragraph pay premiums and fees in connection therewith, provided, however, that such refinancing Indebtedness: (a) does not reduce the Average Life to Stated Maturity or the Stated Maturity of this Section 4.07 after giving effect such Indebtedness, (b) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, is made subordinated in right of payment to such incurrencethe Notes or Guarantee, Acquired Debtas the case may be, at least to the same extent as the Indebtedness being refinanced; (c) shall not be in a principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced; and (d) where the Indebtedness being refunded or refinanced bears a fixed rate of interest, shall not bear interest at a fixed rate greater than the fixed rate of interest borne by the Indebtedness being refunded or refinanced;
(14) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; and
(1415) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (1314) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed $25 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness or portion thereof meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness or portion thereof as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Credit Facility Agreement and the Term Loan which was is in existence on the Acquisition Closing Date in an amount not in excess of the amount permitted to be incurred on or prior to, and outstanding on pursuant to clause (after giving effect to the application 1) of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereofparagraph (b) above, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 above rather than paragraph (a) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Capital Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Capital Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Duane Reade Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (including any Exchange Notes but excluding any Additional NotesNotes and Exchange Notes issued in exchange therefor) and any Guarantee of the NotesExisting Senior Notes or the Notes (excluding Guarantees of Additional Notes and Exchange Notes issued in exchange therefor);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of by the Company or any Guarantor of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) any Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant is permitted to Interest Rate Agreements, but only to be incurred under the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted BusinessIndenture;
(76) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight Seven or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article ElevenTen;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses (2), (3), (1211) and this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount For purposes of the liability thereof shall Indenture, no Indebtedness will be determined deemed to be subordinate or junior in accordance with GAAPright of payment to other Indebtedness solely by virtue of not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the other Indebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Parent shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), and Parent shall not, and shall not permit any Acquired Debt and the issuance of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such however, that Parent and any of its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Parent’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company incurrence by Parent or any Guarantors Restricted Subsidiary of additional Indebtedness (whether as borrowers or guarantorsincluding letters of credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1), including all Permitted Refinancing Indebtedness incurred to renew, refinance or replace, defease or discharge any Indebtedness incurred pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Parent and its Subsidiaries thereunder), not to exceed the greater of (xa) $1,000.0 550.0 million and or (yb) the sum of $650.0 100.0 million and 25.0plus 35% of Adjusted the Consolidated Net Tangible AssetsAssets of Parent determined at the date of such incurrence;
(2) Indebtedness the incurrence by Parent or its Restricted Subsidiaries of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness of represented by the Company or any Restricted Subsidiary outstanding on Initial Notes and the Issue Date, related Note Guarantees and not otherwise referred the Exchange Notes and the related Note Guarantees to in this Section 4.07(b)be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by Parent 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, development, repair or improvement of property, plant or equipment used in the business of Parent or a Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance or replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (a) $35.0 million and (b) 2.75% of the Consolidated Net Tangible Assets of Parent determined at the date of such incurrence;
(5) the incurrence by Parent or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be incurred under Section 4.09(a) above or clause (1)(b), (2), (3), (4)(b), (13), (18), (19) or (21)(b) of this Section 4.09(b) or this clause (5), in the case of clauses (1)(b), (4)(b) or (21)(b), the refinancing of such amount (if lower) as would have been permitted on the date of initial incurrence;
(6) the incurrence by Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its the Parent’s Restricted Subsidiaries; provided, however, that that:
(a) if an Issuer is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither an Issuer nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Guarantor; and
(b) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary thereof of Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither Parent nor a Restricted Subsidiary thereof, shall of Parent will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (46);
(57) guarantees of any Indebtedness of the Company incurrence by Parent or any of its Restricted Subsidiaries which is permitted to be incurred under this Indentureof Hedging Obligations;
(6) 8) the guarantee by Parent or any Restricted Subsidiary of Indebtedness of the Company Parent or any Restricted Subsidiary that constitutes (a) obligations pursuant was permitted to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount be incurred by the Company or any Restricted Subsidiary pursuant to another provision of this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditSection 4.09;
(9) Indebtedness of the Company incurrence by Parent or any of its Restricted Subsidiary with respect to Subsidiaries of obligations relating to oil or net gas balancing positions arising in the ordinary course of businessbusiness and consistent with past practice;
(10) Indebtedness the incurrence by Parent or any of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Elevenits Restricted Subsidiaries of Permitted Hedged Inventory Obligations and Permitted Operating Obligations;
(11) Indebtedness the incurrence by Parent or any of its Restricted Subsidiaries of, to the Company extent such obligations constitute Indebtedness, self-insurance obligations, bid, performance, surety, appeal, performance and similar bonds and completion guarantees issued or provided by, or for the account of, Parent or any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of Parent or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(12) the issuance by any Restricted Subsidiary of Parent to Parent or to any Restricted Subsidiary of Parent of any Disqualified Stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred securities being held by a Person other than Parent or a Restricted Subsidiary of Parent; and
(b) any sale or other transfer of any such preferred securities to a Person that is not either Parent or a Restricted Subsidiary of Parent shall be deemed, in each case, to constitute an issuance of such preferred securities by such Restricted Subsidiary that was not permitted by this clause (12);
(13) Indebtedness arising from agreements 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; provided, however, that such Indebtedness is promptly extinguished;
(14) Indebtedness arising in connection with endorsement of instruments for indemnification or deposit in the ordinary course of business;
(15) Indebtedness arising from indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price adjustment obligations price, earn-out or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business or assets of Parent or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock Equity Interests for the purpose of financing or in contemplation of any such acquisition;
(16) Indebtedness owed on a short-term basis to banks and other financial institutions incurred in the ordinary course of business of Parent and any Restricted Subsidiary or a Person that, contemporaneously with such acquisition banks or disposition, becomes a financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of Parent and any Restricted Subsidiary;
(1217) Permitted Refinancing Indebtedness of the Company Parent or any Restricted Subsidiary issued consisting of the financing of insurance premiums, in exchange foreach case, in the ordinary course of business;
(18) Indebtedness or the net proceeds Disqualified Stock of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) Parent or any Restricted Subsidiary incurred or issued to finance an acquisition or (b) Persons that are acquired by Parent or any Restricted Subsidiary or merged, consolidated or amalgamated with or into Parent or any Restricted Subsidiary in accordance with the terms of this Section 4.07 and clauses the indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation, either: (2), (3), (12i) and (13) of this Section 4.07(b);
(13) if the Company could Parent would be permitted to incur at least $1.00 of additional Indebtedness pursuant to paragraph the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; or (ii) the Fixed Charge Coverage Ratio of Parent would be no less than immediately prior to such acquisition or merger, consolidation or amalgamation;
(19) the incurrence by Parent or any of its Restricted Subsidiaries of Contribution Indebtedness;
(20) the incurrence by Parent or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary of Parent or any Joint Venture but only to the extent that such liability is the result of (a) Parent’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of this Section 4.07 an Equity Interest in, such Unrestricted Subsidiary and not as guarantor of such Indebtedness; provided that after giving effect to any such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all Indebtedness incurred under this clause (20) and then outstanding does not exceed $25.0 million or (b) the pledge of (or a guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by Parent or such Restricted Subsidiary to secure such Indebtedness outstanding and solely to the extent such Indebtedness constitutes Non-Recourse Debt; and
(21) the incurrence by Parent or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any one time in the aggregate shall outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refinance or replace, defease or discharge any Indebtedness incurred pursuant to this clause (21), not to exceed the greater of (xa) $50.0 million and (yb) 3.04.0% of Adjusted the Consolidated Net Tangible AssetsAssets of Parent determined at the date of such incurrence.
(c) For purposes of determining compliance with this Section 4.074.09 and Section 4.12 hereof, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Permitted Debt described in clauses (1) through (21) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, Parent will be permitted to divide, classify and reclassify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company or later redivide or reclassify in whole or in part in its sole discretion may, at in any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided manner that complies with this Section 4.09. Any Indebtedness under a Credit Facility which was incurred Facilities on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) date of this Indenture shall initially be considered incurred under Section 4.07 rather than paragraph (a4.09(b)(1) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one The accrual of interest or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interestpreferred stock dividends or distributions, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof is included in Fixed Charges of Parent as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall denominated in a currency other than U.S. dollars will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If ; provided that if such Indebtedness is secured by incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a letter currency other than U.S. dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange 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 credit that serves only such extension, replacement, refunding, refinancing, renewal, defeasance or exchange, such U.S. dollar-denominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of credit shall be equal to this Section 4.09, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that Parent or any of its Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a price less than the amount result of the liability thereof shall be determined fluctuations in accordance with GAAPexchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) under one or more Credit Facilities Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed at any time outstanding the greater of of: (x) $1,000.0 million 200,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness in accordance with Section 4.10 hereof and (y) an amount that does not cause the sum First Lien Leverage Ratio of $650.0 million and 25.0% the Company to exceed 2.75 to 1.00 determined on a pro forma basis (including the pro forma application of Adjusted Consolidated Net Tangible Assetsthe net proceeds therefrom);
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the First Lien Notes;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, or the Subsidiary Guarantees with respect to the Original Notes, and any Additional Notes issued in respect to any of the foregoing (including as PIK Interest thereon) in accordance with the terms hereof;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed at any time shall not exceed the greater of (x) outstanding $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed25,000,000;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), defease, (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 2% of the Company’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding;
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding and any guarantee thereof;
(m) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2m)), (3)collectively, (12) and (13) of this Section 4.07(b)in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(13n) if Acquired Indebtedness of a Subsidiary of the Company acquired after the Issue Date or a person merged into or consolidated with any member the Company or a Restricted Subsidiary after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Company could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrenceacquisition or other transaction;
(o) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(p) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(q) other than Indebtedness incurred pursuant to clauses (a), Acquired Debt(b), (d), (o) or (p) of the second paragraph of this Section 4.09, Indebtedness incurred in connection with the Permitted Closing Steps;
(r) a Capital Lease Obligation in connection with a Galileo Transaction; and
(14s) any vessel charter being treated as a finance or capital lease under IFRS; The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of of, or otherwise incur, contingently or otherwise incur (collectively, “incur”"INCUR"), any Indebtedness (including any Acquired Debt Indebtedness and the issuance of Disqualified Stock), unless such Indebtedness is incurred by except that the Company or and any Guarantor andSubsidiary Guarantors may incur Indebtedness if, in each caseat the time of such event, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended immediately preceding four full fiscal quarters for which internal financial statements are available immediately preceding available, taken as one accounting period, would have been equal to at least 2.0 to 1.0.
(b) In making the foregoing calculation, pro forma effect will be given to:
(i) the incurrence of such Indebtedness taken and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as one if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period;
(ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period is as if such Indebtedness was incurred, repaid or retired at least equal the beginning of such four-quarter period; and
(iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the foregoing clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and (C) the amount of any Indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to or greater than 2.25:1such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).
(bc) Notwithstanding the foregoing, the Company andmay, to the extent specifically set forth below, the and may permit its Restricted Subsidiaries may to, incur each and all of the following Indebtedness (collectively, the “Permitted Debt”"PERMITTED INDEBTEDNESS"):
(1i) Indebtedness of the Company or any Guarantors Subsidiary Guarantor under the Credit Agreement (whether as borrowers or guarantorsand the incurrence by any Subsidiary Guarantor of guarantees thereof) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $125 million, less (A) any amounts applied to the greater permanent reduction of (x) $1,000.0 million such credit facilities pursuant to the provisions of Section 4.10 hereof and (yB) up to $50 million of cash (or the sum fair market value of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsany other assets) to the extent applied to repurchase Existing Notes on the Issue Date or within two Business Days from the Issue Date;
(2ii) Indebtedness represented by the Notes (other than the Additional Notes) and the related Guarantees;
(iii) Existing Indebtedness;
(iv) the incurrence by the Company of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace, any Indebtedness that is permitted to be incurred under clause (ii) or (iii) above;
(v) Indebtedness owed by the Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided that:
(A) any Indebtedness of the Company or any Subsidiary Guarantor pursuant owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the Notes (excluding any Additional Notes) payment and any Guarantee performance of the Notes;Company's obligations under the Notes or the Subsidiary Guarantor's obligations under its Guarantee, as the case may be; and
(3B) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (ix) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (iiy) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4v);
(5vi) guarantees Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations incurred in the ordinary course of business;
(vii) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(viii) either (A) Capitalized Lease Obligations of the Company or any Restricted Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 90 days of the acquisition of the related property; provided that the aggregate amount of Indebtedness under clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets less the amount of any Indebtedness incurred under clause (xvi) below at any one time outstanding;
(ix) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Section 4.18 hereof;
(x) 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; provided that such Indebtedness is extinguished within two business days of incurrence;
(xi) Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a such Restricted Subsidiary in Subsidiary, as the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatcase may be, in each case contemplated by this clause (8)order to provide security for workers' compensation claims, upon the drawing of such letters of credit or other instrument, such payment obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money self-insurance or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising similar requirements in the ordinary course of business;
(10xii) the incurrence of Non-Recourse Indebtedness by Permitted Joint Ventures that are Restricted Subsidiaries;
(xiii) Indebtedness incurred by a Receivables Subsidiary pursuant to a Receivables Program; provided that, after giving effect to any such incurrence of Indebtedness, the aggregate principal amount of all Indebtedness incurred under this clause (xiii) and then outstanding does not exceed $30 million;
(xiv) Indebtedness of the Company Company, any Restricted Subsidiary or any Permitted Joint Venture not permitted by any other clause of this definition, in an aggregate principal amount not to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Elevenexceed $30 million at any one time outstanding;
(11xv) Indebtedness represented by Attributable Debt related to a Sale and Leaseback transaction involving tractors existing on the Issue Date; provided that (i) the aggregate amount of such Indebtedness does not exceed $7 million and (ii) such Indebtedness is incurred within 12 months from the Issue Date; and
(xvi) the incurrence of Indebtedness represented by Additional Notes and the related Guarantees, the net cash proceeds of which are used to satisfy, extinguish and retire the Company and/or any of the Restricted Subsidiaries' obligations under any Indebtedness incurred under clause (viii) above; provided that (A) any property or assets of the Company or any Restricted Subsidiary arising securing such Indebtedness, the obligations of which are being so satisfied, extinguished and retired, are fully released from agreements for indemnification such security and (B) such property or purchase price adjustment obligations or similar obligations, earn-outs or assets are expressly made subject to a first priority perfected Lien in favor of the Collateral Agent.
(d) The Company will not incur any Indebtedness that is subordinate in right of payment to any other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation Indebtedness of the Company or a Restricted unless it is subordinate in right of payment to the Notes to the same extent. The Company will not permit any Subsidiary pursuant Guarantor to incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Subsidiary Guarantor unless it is subordinate in right of payment to such an agreementSubsidiary Guarantor's Guarantee to the same extent. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in each case incurred or assumed in connection with the acquisition or disposition right of payment to any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing other Indebtedness of the Company or any Restricted Subsidiary issued Guarantor, as applicable, solely by reason of any Liens or Guarantees arising or created in exchange for, respect thereof or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness by virtue of the Company fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements more of such Indebtedness, so long as holders priority over the aggregate principal amount of all such Indebtedness outstanding at any one time other holders in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetscollateral held by them.
(ce) For purposes of determining compliance with this Section 4.074.09, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Indebtedness permitted by this described in clauses (i) through (xvi) above, or is entitled to be incurred pursuant to Section 4.074.09(a) hereof, the Company in will be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under a the Credit Facility which was Agreement incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been incurred pursuant to on the Issue Date in reliance on the exception provided by clause (1i) of paragraph (b) the definition of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Permitted Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (IMI of Arlington, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company shall not and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such however, that each Company and any of its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):) or the issuance of any Disqualified Stock described in clause (12) below:
(1) Indebtedness of the Company incurrence by any Issuer or any Guarantors Restricted Subsidiary of additional Indebtedness (whether as borrowers or guarantorsincluding letters of credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (xi) the Borrowing Base or (ii) $1,000.0 550 million and (y) less the sum aggregate amount of $650.0 million and 25.0% all Net Proceeds of Adjusted Consolidated Net Tangible AssetsAsset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility which result in a corresponding commitment reduction thereunder;
(2) Indebtedness the incurrence by any Company or its Restricted Subsidiaries of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness of represented by the Company or any Restricted Subsidiary outstanding on the Issue Date, Notes issued and not otherwise referred to sold in this Section 4.07(b)offering and the related Note Guarantees;
(4) the incurrence by any 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 a Restricted Subsidiary, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance or replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (a) $25.0 million or (b) 2.5% of the Consolidated Net Tangible Assets of the Company;
(5) the incurrence by any Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Indenture to be incurred under Section 4.09(a) above or clause (2), (3) or (13) of this Section 4.09(b) or this clause (5);
(6) the incurrence by any Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its the Company’s Restricted Subsidiaries; provided, however, that that:
(a) if an Issuer is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither an Issuer nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes Guarantee of such Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereof, shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (46);
(57) guarantees the incurrence by any Company or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the guarantee by any Issuer or any Restricted Subsidiary of Indebtedness of an Issuer or any Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.09;
(9) the incurrence by any Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business and consistent with past practice;
(10) the incurrence by any Company or any of its Restricted Subsidiaries of Permitted Hedged Inventory Obligations and Permitted Operating Obligations;
(11) the incurrence by any Company or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, including guarantees and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations Subsidiaries with respect to letters of credit supporting such obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred other than an obligation for money borrowed);
(12) the purpose of financing, refinancing, renewing, defeasing or refunding all or issuance by any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business Restricted Subsidiary of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by to the Company or to any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or of any Restricted Subsidiary under Disqualified Stock; provided, however, that:
(a) one any subsequent issuance or more standby letters transfer of credit issued Equity Interests that results in any such preferred securities being held by or for the account of a Person other than the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such preferred securities to a Person that is not either the Company or a Restricted Subsidiary of the Company shall be deemed, in each case, to constitute an issuance of such preferred securities by such Restricted Subsidiary that was not permitted by this clause (12);
(13) 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 and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawingbusiness; provided, furtherhowever, that with respect to clauses (a) and (b), such Indebtedness is not promptly extinguished;
(14) Indebtedness arising in connection with the borrowing endorsement of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising instruments for deposit in the ordinary course of business;
(1015) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or indemnification, adjustment of purchase price adjustment obligations price, earn-out or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, business or assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued or Equity Interests of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in exchange for, or the net proceeds contemplation of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)such acquisition;
(1316) if Indebtedness owed on a short-term basis to banks and other financial institutions incurred in the ordinary course of business of the Company could incur $1.00 and any Restricted Subsidiary with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; andthe Company and any Restricted Subsidiary;
(1417) Indebtedness of the Company or any Restricted Subsidiary consisting of the financing of insurance premiums, in addition each case, in the ordinary course of business;
(18) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in Section 5.01(a)(4);
(19) the incurrence by the Company or any of its Restricted Subsidiaries of Contribution Indebtedness;
(20) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with MLP Formation Transactions to that described the extent such Indebtedness is extinguished in clauses connection with the proceeds from a Qualified MLP IPO; and
(121) through (13) above, and the incurrence by the Company or any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall outstanding, not to exceed the greater of (xa) $50.0 million and or (yb) 3.04% of Adjusted the Consolidated Net Tangible AssetsAssets of the Company.
(c) For purposes of determining compliance with this Section 4.074.09 and Section 4.12 hereof, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt described in clauses (1) through (21) of Section 4.074.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of discretion) such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided in any manner that complies with this Section 4.09. Any Indebtedness under a Credit Facility which was incurred Facilities on or prior to, and outstanding on (after giving effect to the application date of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, this Indenture shall be deemed to have been considered incurred pursuant to clause (1under Section 4.09(b)(1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one The accrual of interest or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interestpreferred stock dividends, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation Fixed Charges of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) Company as accrued. For purposes of determining compliance with any dollar-U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter . Notwithstanding any other provision of credit that serves only to secure such Indebtednessthis Section 4.09, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed exceeded solely as a price less than the amount result of the liability thereof shall be determined fluctuations in accordance with GAAPexchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will W▇▇▇ Las Vegas shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), or (ii) issue any Acquired Debt and the issuance of Disqualified Stock). Notwithstanding the foregoing, unless such W▇▇▇ Las Vegas and its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio of W▇▇▇ Las Vegas for the W▇▇▇ Las Vegas’ most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be (the “Reference Period”) would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds from the Indebtedness, as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations), to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (xi) $1,000.0 million and 1.0 billion less (yii) the sum aggregate amount of $650.0 million all Net Proceeds of Assets Sales applied by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under the Credit Agreement or repay any revolving credit Indebtedness under the Credit Agreement and 25.0% effect a corresponding permanent reduction of Adjusted Consolidated Net Tangible Assetscommitments thereunder pursuant to Section 4.10 hereof or otherwise;
(2) Indebtedness the incurrence by the Issuers and the Restricted Subsidiaries of W▇▇▇ Las Vegas of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under this Section 4.07(b4.09(a), under clauses (2), (7), (8), (9), (12), (13), (14) or (15) of this Section 4.09(b), or under this clause (3);
(4) incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company W▇▇▇ Las Vegas and any of its Restricted Subsidiaries; provided, however, that:
(A) if W▇▇▇ Las Vegas or any Guarantor is the obligor on such Indebtedness and the payee is not W▇▇▇ Las Vegas or a Guarantor, such Indebtedness must be expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of W▇▇▇ Las Vegas, or its Note Guarantee under this Indenture, in the case of a Guarantor, except that no Indebtedness of W▇▇▇ Las Vegas or any Guarantor shall be deemed to be subordinated in right of payment to any other Indebtedness of W▇▇▇ Las Vegas or any such Guarantor solely by virtue of being unsecured; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company W▇▇▇ Las Vegas or a Restricted Subsidiary thereof thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither W▇▇▇ Las Vegas nor a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company W▇▇▇ Las Vegas or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business;
(6) the incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness solely in respect of performance, and (c) obligations pursuant to hedging arrangements (includingsurety, without limitationappeal or similar bonds or commercial or standby letters of credit, swaps, caps, floors, collars, options and similar agreements) entered into so long as such Indebtedness is incurred in the ordinary course of business for and the purpose aggregate amount of mitigating against risks encountered in a Permitted Businessall such bonds and standby letters of credit is not greater than $60.0 million at any time outstanding;
(7) Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiary Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development equipment (including acquisitions of property Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the business Projects by W▇▇▇ Las Vegas or any of the Company or its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding ), not to exceed $100.0 million at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiary under (a) one Subsidiaries of Indebtedness in a principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by discharge any Indebtedness incurred pursuant to this clause (8), upon not to exceed, at any time, 75% of the drawing aggregate cost of such letters the Phase III Project to pay the costs and expenses of credit or other instrumentdesigning, such obligations are reimbursed within 60 days following such drawing; provideddeveloping and constructing the Phase III Project, further, that with respect so long as the Holders continue to clauses (a) and (b), such Indebtedness is not have a perfected first priority security interest in connection with the borrowing of money or the obtaining of advances or creditGolf Course Land;
(9) the incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of the Company Equity Interests of Wynn Resorts or any Restricted Subsidiary with respect permitted pursuant to obligations relating to oil or gas balancing positions arising in the ordinary course clause (6) of businessSection 4.07(b) hereof;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven[intentionally omitted];
(11) Indebtedness of the Company incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligationsSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant not to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryexceed $100.0 million;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)2014 Notes;
(13) if the Company could incur $1.00 2017 Notes;
(14) the 2020 Notes;
(15) the incurrence by the Issuers of the Notes issued on the date of this Indenture and the Note Guarantees;
(16) the incurrence of Indebtedness (and the Guarantee of such Indebtedness by W▇▇▇ Las Vegas) in an amount not to exceed 100% of the Fair Market Value of the Aircraft, which is secured only by Liens permitted by clause (26) of the definition of “Permitted Liens;”
(17) the incurrence by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness pursuant (so long as such Indebtedness is incurred under the Credit Agreement, through the issuance of Additional Notes under this Indenture, is unsecured Indebtedness or is Permitted Junior Debt) to paragraph be used to develop and construct an Additional Entertainment Facility and/or a Retail Facility on land included in the Projects in an aggregate principal amount (aor original accreted value, as applicable) at any time not to exceed 662/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility; provided that, subsequent to the date of this Section 4.07 after giving effect Indenture and on or prior to the date of the incurrence of such incurrenceIndebtedness, Acquired Debtnet cash proceeds have been received by W▇▇▇ Las Vegas as a contribution to its common equity capital in an amount equal to at least 331/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility, which proceeds have been irrevocably committed at the time of such contribution for use in the development and construction of such Additional Entertainment Facility and/or a Retail Facility; and
(1418) the incurrence by W▇▇▇ Capital, as co-obligor, of any Indebtedness of which W▇▇▇ Las Vegas is permitted to incur pursuant to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsforegoing provisions.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in (1) through (17) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers shall be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application of proceeds of Notes), date on which the Issue Date, Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, authenticated under this Indenture shall initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (bSection 4.09(b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual hereof. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that W▇▇▇ Las Vegas or any of its Restricted Subsidiaries may incur pursuant to this Section 4.07; provided4.09 shall not be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, any Indebtedness which is permitted to be incurred by W▇▇▇ Las Vegas or any of its Restricted Subsidiaries under clause (7) set forth above may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount;
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate Indebtedness, in effect on the date that such Indebtedness was incurred.case of any other Indebtedness; and
(g3) If in respect of Indebtedness is of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xA) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hB) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Wynn Resorts LTD)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.0 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater greatest of (x) $1,000.0 million and 725.0 million, (y) the sum of $650.0 250.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness and (z) the Borrowing Base as of such date;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes, the Concurrently Issued Notes or the Notes (excluding any Additional Notes) and any Guarantee of the Existing Senior Notes, the Concurrently Issued Notes or the Notes (excluding any Guarantee of Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness must be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of by the Company or any Guarantor of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) any Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant is permitted to Interest Rate Agreements, but only to be incurred under the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted BusinessIndenture;
(76) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 30.0 million and (y) 1.53.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight Seven or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article ElevenTen;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (1211) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 40.0 million and (y) 3.04.0% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC 815), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-U.S. dollar denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-U.S. dollar equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount For purposes of the liability thereof shall Indenture, no Indebtedness will be determined deemed to be subordinate or junior in accordance with GAAPright of payment to other Indebtedness solely by virtue of not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the other Indebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Partnership will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), the Partnership will not issue any Acquired Debt Disqualified Stock, and the issuance Partnership will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Stock); provided, unless such however, that the Partnership and any Restricted Subsidiary may incur Indebtedness is incurred by the Company (including Acquired Debt) or any Guarantor andissue Disqualified Stock if, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Partnership’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, the Fixed Charge Coverage Ratio would have been at least 1.75 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):) or the issuance of any Disqualified Stock described below:
(1) Indebtedness of the Company incurrence by the Partnership or any Guarantors of its Restricted Subsidiaries of Indebtedness (whether as borrowers or guarantorsincluding guarantees and letters of credit) under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Partnership and its Subsidiaries thereunder) and then outstanding at any one time does not to exceed the greater of (xa) $1,000.0 100.0 million and (yb) the sum of $650.0 million and 25.07.5% of Adjusted the Partnership’s Consolidated Net Tangible AssetsAssets determined on the date of such incurrence;
(2) the incurrence by the Issuers and the Guarantors of Indebtedness of represented by the Company or any Guarantor pursuant to Initial Notes and the Notes (excluding any Additional Notes) and any Guarantee of the Notesrelated Note Guarantees;
(3) Indebtedness the incurrence by the Partnership or its Restricted Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, Existing Indebtedness other than Indebtedness described in clauses (1) and not otherwise referred to in (2) of this Section 4.07(b4.09(b);
(4) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Finance Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Partnership or any of its Restricted Subsidiaries of Disqualified Stock, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other assets used in the business of the Partnership or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $45.0 million and (b) 4.5% of the Partnership’s Consolidated Net Tangible Assets determined at the time of such incurrence;
(5) the incurrence by the Partnership or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to, extend, refinance, renew, replace, defease or refund Indebtedness that was permitted by this Indenture to be incurred (or Disqualified Stock permitted to be issued) under Section 4.09(a) hereof or clauses (2), (3), (4), (12), (13), (18) or (23) of this Section 4.09(b) or this subclause 4.09(b)(5);
(6) the incurrence by the Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that that:
(A) if the Partnership is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Partnership nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Partnership or a Restricted Subsidiary thereof of the Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Partnership nor a Restricted Subsidiary thereof, shall of the Partnership will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4subclause 4.09(b)(6);
(57) guarantees of any Indebtedness of the Company incurrence by the Partnership or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary Hedging Contracts in the ordinary course of business and (b) other letters of creditnot for speculative purposes, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such including any obligations with respect to letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not issued in connection with therewith;
(8) the borrowing guarantee by the Partnership or any of money its Restricted Subsidiaries of Indebtedness of the Partnership or the obtaining any of advances or creditits Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(9) Indebtedness of the Company incurrence by the Partnership or any of its Restricted Subsidiary with respect to Subsidiaries of obligations relating to oil or gas net Hydrocarbon balancing positions arising in the ordinary course of business;
(10) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company Partnership and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Partnership or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(11) the issuance by any of the Partnership’s Restricted Subsidiaries to the Partnership or to any of its Restricted Subsidiaries of any Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Partnership or a Restricted Subsidiary of the Partnership; and
(B) any sale or other transfer of any such Disqualified Stock to a Person that is not either the Partnership or a Restricted Subsidiary of the Partnership, shall be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this subclause 4.09(b)(11);
(12) the incurrence or issuance by the Partnership or any of its Restricted Subsidiaries of (a) Indebtedness or Disqualified Stock of the Partnership or a Restricted Subsidiary incurred to finance an acquisition and (b) Acquired Debt incurred by the Partnership or a Restricted Subsidiary, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (i) the Partnership would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) the Fixed Charge Coverage Ratio for the Partnership would not be less than immediately prior to such transactions;
(13) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Partnership or any of its Restricted Subsidiaries of Disqualified Stock, provided that, after giving effect to any such incurrence or issuance, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred pursuant to subclause (5) of this Section 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred or Disqualified Stock issued under this clause (13), does not exceed the greater of $60.0 million and 4.5% of the Partnership’s Consolidated Net Tangible Assets;
(14) Indebtedness incurred by the Partnership or any Restricted Subsidiary of the Partnership to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes pursuant to Article Eight or Article Elevenin accordance with this Indenture;
(1115) Indebtedness of the Company Partnership or any Restricted Subsidiary arising from agreements of the Partnership consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements, including, without limitation, long-term off-take contracts for indemnification or purchase price adjustment obligations or similar obligationsHydrocarbons, earn-outs or other similar obligations or from guarantees or letters incurred in the ordinary course of business;
(16) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, surety bonds warehouse receipt or performance bonds securing any obligation similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(17) Guarantees (a) incurred in the Company ordinary course of business in respect of obligations of (or a Restricted Subsidiary pursuant to such an agreementto) suppliers, customers, franchisees, lessors and licensees that, in each case incurred case, are non-Affiliates or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary(b) otherwise constituting Investments not prohibited hereunder;
(1218) Permitted Refinancing Indebtedness issued by the Partnership or any of its Restricted Subsidiaries to any current, future or former director, officer, consultant or employee of the Company Partnership, the General Partner, any other direct or indirect parent of the Partnership or any Restricted Subsidiary issued in exchange forof the Partnership (or any of their Affiliates), or their estates or the net proceeds beneficiaries of which are used such estates to renewfinance the purchase, extendredemption, substituteacquisition or retirement for value of Equity Interests permitted by Section 4.07(b)(5) hereof, defease, refund, refinance or replace, in an aggregate principal amount at any Indebtednesstime outstanding, including any Disqualified Stock, all Permitted Refinancing Indebtedness incurred pursuant to paragraph subclause (a5) of this Section 4.07 and clauses 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (218), (3), (12) and (13) not to exceed $5.0 million as of this Section 4.07(b)any date of incurrence;
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(1419) Indebtedness of incurred in connection with any Sale and Leaseback Transaction not relating to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, Principal Properties and any renewalsrefinancing, extensionsrefunding, substitutions, refinancings renewal or replacements extension of any such Indebtedness, so long as provided that, except to the aggregate extent otherwise permitted hereunder, the principal amount of all any such Indebtedness is not increased above the principal amount thereof outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07immediately prior to such refinancing, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07refunding, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all renewal or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount extension and the payment of interest on any Indebtedness in the form of additional Indebtedness direct and contingent obligors with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant respect to such Indebtedness are not changed;
(20) Indebtedness in respect of overdraft facilities, employee credit card programs and such letter other cash management arrangements in the ordinary course of credit shall be equal business;
(21) Indebtedness representing deferred compensation to the greater of (x) the principal employees of the Indebtedness so secured by such letter Partnership (or any direct or indirect parent of credit the Partnership) and (y) its Restricted Subsidiaries incurred in the amount that may be drawn under such letter ordinary course of credit.business;
(h22) The amount Indebtedness in respect of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.Treasury Management Arrangements; and
Appears in 1 contract
Sources: Indenture (CVR Energy Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company shall not and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such however, that the Company, the Issuers and the Subsidiary Guarantors may incur Indebtedness is incurred by the Company (including Acquired Debt) or any Guarantor andissue Disqualified Stock, in each case, if the Company’s Consolidated Fixed Charge Coverage Leverage Ratio for at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the same had occurred at the end of the most recently-recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or available, would have been no greater than 2.25:13.0 to 1.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of following the Company Refinancing Date, (A) the incurrence by either Issuer or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Guarantor of Priority Lien Debt in an aggregate principal amount at any one time outstanding not to exceed the Priority Lien Cap and (B) the incurrence by the U.S. Issuer or any U.S. Guarantor of U.S. Junior Lien Debt incurred in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge (i) Second Lien Debt or (ii) or U.S. Junior Lien Debt that was permitted by this Indenture to be incurred under this clause, in an aggregate principal amount at any time outstanding not to exceed the U.S. Junior Lien Cap;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by either Issuer or any Guarantor of (A) Parity Lien Debt represented by the Notes and the Note Guarantees and (B) other Parity Lien Debt incurred in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge (i) Second Lien Debt or (ii) or Parity Lien Debt that was permitted by this Indenture to be incurred under this clause, in an aggregate amount incurred pursuant to sub-clause (1A) and (B) not to exceed the greater Parity Lien Cap; provided that, the aggregate amount of (x) $1,000.0 million and (y) Canadian Parity Lien Debt at the sum time of $650.0 million and 25.0incurrence of any Canadian Parity Lien Debt may not exceed 34.62% of Adjusted Consolidated Net Tangible Assetsthe Parity Lien Cap;
(24) 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 (whether or not incurred at the time of such purchase, design, construction, installation or improvement) all or any part of the purchase price or cost of design, construction, installation, integration or improvement of property, plant or equipment used in the business of the Company or any Guarantor of its Restricted Subsidiaries, or ownership rights with respect to indefeasible rights of use or minimum investment units (or similar ownership units) in domestic or transnational fiber optic cable or other transmission facilities, and, in each case, including acquisitions by way of acquisitions of the Capital Stock of a Person that becomes a Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the Notes this clause (excluding 4), not to exceed $10.0 million at any Additional Notes) and any Guarantee of the Notestime outstanding;
(35) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to renew, and not otherwise referred refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under Section 4.09(a) hereof or clauses (2), (4), (5), (14) or (15) of this Section 4.07(b4.09(b);
(46) 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 that:
(A) if the either Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not either Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Issuers, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (46);
(57) guarantees the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any Indebtedness such Disqualified Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into Hedging Obligations in the ordinary course of business for and any Hedging Obligations related to Canadian Parity Lien Debt or incurred to hedge any interest rate risk on any fixed or floating rate Indebtedness that was permitted to be incurred under the purpose first paragraph of mitigating against risks encountered in a this covenant or any clause under the definition of “Permitted BusinessDebt”;
(79) Indebtedness of (i) the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred Guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed Issuers and the greater Guarantors of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in of the ordinary course Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of business this covenant; provided that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed; and (bii) other letters the Guarantee by Restricted Subsidiaries that are not Guarantors of creditIndebtedness of Restricted Subsidiaries that are not Guarantors to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant;
(10) the incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, surety, bid, performance, appeal or similar bondsself-insurance obligations, bankers’ acceptances, completion guarantees or similar instruments; provided thatperformance, in each case contemplated by this clause (8), upon the drawing of such letters letter of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) completion or performance and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising surety bonds in the ordinary course of business;
(1011) the incurrence by either Issuer or any of the Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five (5) Business Days;
(12) Indebtedness arising from agreements of the Company to or a Restricted Subsidiary providing for indemnification, adjustment or purchase price or similar obligations, in each case, incurred or assumed in connection with the extent disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Elevenpurpose of financing such acquisition;
(1113) Indebtedness representing installment insurance premiums of the Company or any Restricted Subsidiary arising from agreements for indemnification owing to insurance companies in the ordinary course of business;
(14) (i) Indebtedness of any Persons existing at the time such Persons become Subsidiary Guarantors or purchase price adjustment obligations Australian Restricted Subsidiaries or similar obligationsare merged with or into or consolidated with either Issuer or any Guarantor or Australian Restricted Subsidiary, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the an acquisition of property (including Capital Stock) by either Issuer or disposition of any business, assets Guarantor or Capital Stock of a Australian Restricted Subsidiary and (ii) other Indebtedness incurred in connection with an Asset Acquisition by either Issuer or a Person thatany Guarantor or Australian Restricted Subsidiary, contemporaneously with provided that such Indebtedness was in existence prior to the contemplation of such Persons becoming Subsidiary Guarantors or Australian Restricted Subsidiaries or such merger or consolidation or such acquisition of property or dispositionAsset Acquisition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness provided further that the ratio of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding incurred with respect to any such transaction to Consolidated EBITDA (for the most recent four-quarter period for which financial information is available) attributable to the Person or property so acquired pursuant to such transaction (as determined in good faith by the Company) is 2.5 to 1.0 or less (the “Acquisition Debt Ratio Test”), and: (A) such Indebtedness is subordinated in right of payment (and, if such Indebtedness is secured by Liens on any Collateral, subordinated in lien priority) to the Notes in a manner substantially similar to the payment subordination (and lien subordination, as applicable) provisions applicable to the Second Lien Debt pursuant to the Intercreditor Agreement, and does not mature prior to a date which is ninety-one (91) days following the final maturity date of the Notes; or (B) such Indebtedness is non-recourse to the Company and its Restricted Subsidiaries (other than any acquired Persons and the purchaser of such acquired property or Persons); or (C) any combination of the preceding clauses (A) and (B) so long as the incurrence of any Indebtedness under the preceding clauses (A) and (B) or any combination thereof complies with the Acquisition Debt Ratio Test at the time of incurrence and does not exceed (together with all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14)) $20.0 million in the aggregate at any one time outstanding; and
(15) the incurrence by the Company or any of the Restricted Subsidiaries of additional Indebtedness in the an aggregate shall principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets10.0 million.
(c) The Company shall not incur, and shall not permit the Issuers or any other Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company, the Issuers or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuers solely by virtue of being unsecured or by virtue of being secured on junior priority basis or junior in right of distribution of collateral proceeds.
(d) For purposes of determining compliance with this Section 4.074.09 and Section 4.12 hereof, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt described in clauses (1) through (15) of Section 4.074.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted (in its sole discretion maydiscretion) to classify such item of Indebtedness on the date of its incurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this covenant. Notwithstanding the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior toforegoing, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall all Priority Lien Debt will be deemed to have been incurred pursuant to in reliance on the exception provided by clause (1) of paragraph the definition of Permitted Debt and all Parity Lien Debt outstanding on the date of this Indenture will be deemed to have been incurred in reliance on the exception provided by clause (b3) of this Section 4.07 rather than paragraph (a) the definition of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one Permitted Debt. The accrual of interest or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interestpreferred stock or Disqualified Stock dividends, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any preferred stock or Disqualified Stock or Preferred Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be of any such accrual, accretion or payment is included as required in the calculation Consolidated Interest of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(he) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at a price less than the date of determination; and
(B) the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will ▇▇▇▇ Las Vegas shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Debt), or (ii) issue any Acquired Debt and the issuance of Disqualified Stock). Notwithstanding the foregoing, unless such ▇▇▇▇ Las Vegas and its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if (A) the Company or any Guarantor and, in each case, Phase I Opening Date has occurred and (B) the Company’s Consolidated Fixed Charge Coverage Ratio of ▇▇▇▇ Las Vegas for the ▇▇▇▇ Las Vegas' most recently-recently ended four full fiscal quarters following the Phase I Opening Date for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be (the "Reference Period") would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds from the Indebtedness, as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “"Permitted Debt”"):
(1) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations), to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (xi) $1,000.0 million and 1.0 billion less (yii) the sum aggregate amount of all Net Proceeds of Assets Sales applied by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under the Credit Agreement or repay any revolving credit Indebtedness under the Credit Agreement and effect a corresponding permanent reduction of commitments thereunder pursuant to Section 4.10 hereof or otherwise; provided, however, if the Phase II Project Budget and the Phase II Plans and Specifications are not approved by a majority of the arrangers or a majority of the lenders under the Credit Agreement by June 30, 2005, then the amount of Indebtedness permitted to be incurred under the Credit Agreement pursuant to clause (i) above of this clause (1) shall be reduced by $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets550.0 million;
(2) Indebtedness the incurrence by the Issuers and the Restricted Subsidiaries of ▇▇▇▇ Las Vegas of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under this Section 4.07(b4.09(a), under clauses (2), (7), (8), (9) or (12) of this Section 4.09(b), or under this clause (3);
(4) incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company ▇▇▇▇ Las Vegas and any of its Restricted Subsidiaries; provided, however, that:
(a) if ▇▇▇▇ Las Vegas or any Guarantor is the obligor on such Indebtedness and the payee is not ▇▇▇▇ Las Vegas or a Guarantor, such Indebtedness must be expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of ▇▇▇▇ Las Vegas, or its Note Guarantee under this Indenture, in the case of a Guarantor, except that no Indebtedness of ▇▇▇▇ Las Vegas or any Guarantor shall be deemed to be subordinated in right of payment to any other Indebtedness of ▇▇▇▇ Las Vegas or any such Guarantor solely by virtue of being unsecured; and
(i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company ▇▇▇▇ Las Vegas or a Restricted Subsidiary thereof thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither ▇▇▇▇ Las Vegas nor a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company ▇▇▇▇ Las Vegas or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business;
(6) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness solely in respect of performance, and (c) obligations pursuant to hedging arrangements (includingsurety, without limitationappeal or similar bonds or commercial or standby letters of credit, swaps, caps, floors, collars, options and similar agreements) entered into so long as such Indebtedness is incurred in the ordinary course of business for and the purpose aggregate amount of mitigating against risks encountered in a Permitted Businessall such bonds and standby letters of credit is not greater than $40.0 million at any time outstanding;
(7) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development equipment (including acquisitions of property Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the business Projects by ▇▇▇▇ Las Vegas or any of the Company or its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding ), not to exceed $100.0 million at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary under (a) one Subsidiaries of Indebtedness in a principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by discharge any Indebtedness incurred pursuant to this clause (8), upon not to exceed, at any time, 75% of the drawing aggregate cost of such letters the Phase III Project to the pay the costs and expenses of credit or other instrumentdesigning, such obligations are reimbursed within 60 days following such drawing; provideddeveloping and constructing the Phase III Project, further, that with respect to clauses so long as:
(a) and the Phase II Opening Date has occurred;
(b), ) the Holders of the Notes continue to have a perfected first priority security interest in the Golf Course Land; and
(c) ▇▇▇▇ Las Vegas' and its Restricted Subsidiaries' total Indebtedness does not exceed 6.5 times Consolidated EBITDA for the four full fiscal quarters immediately preceding the date of such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditincurrence;
(9) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of the Company Equity Interests of Wynn Resorts or any Restricted Subsidiary with respect permitted pursuant to obligations relating clause (6) of Section 4.07(b) hereof;
(10) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries on or prior to oil the Phase II Final Completion Date of Indebtedness represented by performance bonds, guaranties, trade letters of credit, bankers' acceptances or gas balancing positions arising similar instruments issued by Person other than Wynn Resorts or any of its Restricted Subsidiaries for the benefit of a trade creditor of any such Person, in an aggregate amount not to exceed $20.0 million at any time outstanding so long as:
(a) such Indebtedness is incurred in the ordinary course of business;; and
(10b) Indebtedness the obligations of ▇▇▇▇ Las Vegas or the applicable Restricted Subsidiary, as the case may be, supported by such performance bonds, guaranties, trade letters of credit, bankers' acceptances or similar instruments (A) consist solely of payment obligations with respect to costs incurred in accordance with the Phase I Project Budget and the Phase II Project Budget, as applicable, which would otherwise be permitted to be paid by the applicable entity pursuant to the Disbursement Agreement and (2) if secured, are secured solely by Liens permitted by clause (22) of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Elevendefinition of "Permitted Liens;" and
(11) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligationsSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant not to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryexceed $40.0 million;
(12) Permitted Refinancing Indebtedness the incurrence by the Issuers and the Guarantors of the Company or any Restricted Subsidiary Notes issued in exchange for, or on the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) date of this Section 4.07 Indenture in an aggregate principal amount of $1.3 billion and clauses (2), (3), (12) and (13) of this Section 4.07(b)the Exchange Notes related thereto;
(13) if the Company could incur $1.00 incurrence of Indebtedness (and the Guarantee of such Indebtedness by ▇▇▇▇ Las Vegas) in an amount not to exceed 100% of the Fair Market Value of the Aircraft, which is secured only by Liens permitted by clause (26) of the definition of "Permitted Liens;"
(14) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness pursuant (so long as such Indebtedness is incurred under the Credit Agreement, through the issuance of Additional Notes under this Indenture, is unsecured Indebtedness or is Permitted Junior Debt) to paragraph be used to develop and construct an Additional Entertainment Facility and/or a Retail Facility on land included in the Projects in an aggregate principal amount (aor original accreted value, as applicable) at any time not to exceed 662/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility; provided that, subsequent to the date of this Section 4.07 after giving effect Indenture and on or prior to the date of the incurrence of such incurrenceIndebtedness, Acquired Debtnet cash proceeds have been received by ▇▇▇▇ Las Vegas as a contribution to its common equity capital in an amount equal to at least 331/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility, which proceeds have been irrevocably committed at the time of such contribution for use in the development and construction of such Additional Entertainment Facility and/or a Retail Facility; and
(1415) the incurrence by Wynn Capital, as co-obligor, of any Indebtedness of which ▇▇▇▇ Las Vegas is permitted to incur pursuant to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsforegoing provisions.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in (1) through (14) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers shall be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application of proceeds of Notes), date on which the Issue Date, Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, authenticated under this Indenture shall initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (bSection 4.09(b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual hereof. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries may incur pursuant to this Section 4.07; provided4.09 shall not be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, any Indebtedness which is permitted to be incurred by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries under clause (7) set forth above may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount;
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate Indebtedness, in effect on the date that such Indebtedness was incurred.case of any other Indebtedness; and
(g3) If in respect of Indebtedness is of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xa) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hb) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Wynn Resorts LTD)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Subject to Section 8.1(b), the Borrower will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, assume or directly or indirectly guarantee or otherwise in any other manner become directly or indirectly liable for the payment of or otherwise ("incur, contingently or otherwise (collectively, “incur”), ") any Indebtedness (including Acquisition Debt) or issue any Acquired Debt and the issuance of Disqualified Stock); provided however, unless such that the Borrower may incur Subordinated ----------------- Indebtedness is incurred by or issue Disqualified Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Borrower's Pro Forma Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the incurrence date of such Indebtedness taken as one period is at least equal incurrence or issuance would not be less than 2.50 to 1.00 after giving effect to such incurrence or greater than 2.25:1issuance and (if applicable) the application of the net proceeds therefrom.
(b) Notwithstanding Section 8.1(a) shall not limit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following (collectively, the “Permitted Debt”):following:
(1i) Indebtedness of the Company or any Guarantors Borrower under the Revolving Credit Facility (whether as borrowers or guarantorsincluding Guarantees thereof by the Borrower's Subsidiaries) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $800,000,000 minus the greater aggregate amount of (xall permanent reductions in the Revolving Credit Commitments pursuant to Section 2.7(e) $1,000.0 million and (y) of the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible AssetsRevolving Credit Facility;
(2ii) Indebtedness existing on the date hereof set forth on Schedule 8.1;
(iii) Indebtedness of the Company or any Guarantor pursuant to Borrower represented by the Notes Term Loans (excluding any Additional Notes) and any Guarantee of including Guarantees thereof by the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(bBorrower's Subsidiaries);
(4iv) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; Refinancing Indebtedness, provided, however, that (i1) any subsequent issuance the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of Indebtedness so extended, refinanced, renewed, replaced, substituted, defeased or transfer refunded (plus the amount of Capital Stock that results expenses incurred and premiums paid in any connection therewith), (2) the Weighted Average Life to Maturity of such Refinancing Indebtedness shall have be equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being held by a Person other than the Company extended, refinanced, renewed, replaced, substituted, defeased or a Restricted Subsidiary thereof refunded, and (ii3) any sale or other transfer with respect to Refinancing Indebtedness of any Subordinated Indebtedness, such Refinancing Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, at least as subordinated in each case, right of payment to constitute an incurrence the Term Loans (in the case of such Refinancing Indebtedness incurred by the Company Borrower) or such Restricted to the Guarantees thereof (in the case of Refinancing Indebtedness incurred by any Guarantor Subsidiary, ) as the case may beIndebtedness being extended, that was not refinanced, replaced, renewed, substituted, defeased or refunded;
(v) Indebtedness of the Borrower's Subsidiaries to the Borrower to the extent permitted by this clause (4pursuant to Section 8.5(f);
(5vi) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary Hedging Obligations that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case are incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all hedging foreign currency exchange risk or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that interest rate risks with respect to clauses (a) and (b), such any floating rate Indebtedness that is not in connection with permitted by the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) terms of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed Agreement to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.outstanding;
Appears in 1 contract
Sources: Term Loan Agreement (Total Renal Care Holdings Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createdirectly or indirectly, create incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if:
(i) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, the “Permitted DebtIndebtedness”):
): (1a) the Indebtedness of evidenced by the Initial Securities; (b) the Indebtedness evidenced by the Company’s 73/8% Senior Subordinated Notes and 63/8% Senior Subordinated Notes; (c) the incurrence by the Company or any Guarantors (whether of its Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so long as borrowers or guarantors) under one or more Credit Facilities in an the aggregate principal amount of all Indebtedness incurred pursuant to this clause (c) and outstanding under all Credit Facilities does not, at any one time outstanding under this clause (1) not to time, exceed the greater of (1) $600.0 million and (2) an amount equal to the sum of (x) $1,000.0 50 million and plus (y) the sum of $650.0 million and 25.030% of Adjusted Consolidated Net Tangible Assets;
Assets determined after the incurrence of such Indebtedness (2including the application of the proceeds therefrom), (d) the guarantee by any Subsidiary Guarantor of any Indebtedness that is permitted by this Indenture to be incurred by the Company; (e) all Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee its Restricted Subsidiaries in existence as of the Notes;
date of this Indenture; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4f) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i1) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Securities and (2) (A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause ; (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6g) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guarantees, performance bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9) Indebtedness of the Company other than advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of business;
business and on terms and conditions which are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit guarantee or performance bond itself), not to exceed in the aggregate at any given time 5.0% of Total Assets; (10h) Indebtedness under Interest Rate Hedging Agreements entered into for the purpose of limiting interest rate risks, provided that the obligations under such agreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant and that the aggregate notional principal amount of such agreements does not exceed 105% of the principal amount of the Indebtedness to which such agreements relate; (i) Indebtedness under Oil and Gas Hedging Contracts, provided that such contracts were entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries; (j) the incurrence by the Company of Indebtedness not otherwise permitted to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes be incurred pursuant to Article Eight this paragraph, provided that the aggregate principal amount (or Article Eleven;
(11accreted value, as applicable) of all Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary incurred pursuant to such an agreementthis clause (j), together with all Permitted Refinancing Debt incurred pursuant to clause (k) of this paragraph in each case respect of Indebtedness previously incurred or assumed in connection with the acquisition or disposition of pursuant to this clause (j), does not exceed $10.0 million at any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
one time outstanding; (12k) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued Debt incurred in exchange for, or the net proceeds of which are used to renewrefinance, extend, substituterenew, defeasereplace, defease or refund, refinance or replace, any Indebtedness, Indebtedness that was permitted by this Indenture to be incurred (including any Disqualified Stock, Indebtedness previously incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2), (3), (12k) and Indebtedness referred to in clause (13e) of this Section 4.07(babove);
; (13l) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted Subsidiary in addition the ordinary course of business in connection with the obtaining of goods or services; and (m) Indebtedness consisting of obligations in respect of purchase price adjustments, guarantees or indemnities in connection with the acquisition or disposition of assets. The Company shall not permit any of its Unrestricted Subsidiary to that described in clauses (1) through (13) aboveincur any Indebtedness other than Non-Recourse Debt; provided, and however, if any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in ceases to be Non-Recourse Debt, such event shall be deemed to constitute an incurrence of Indebtedness by the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) Company. For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types 4.09: (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(dA) Indebtedness permitted by this Section 4.07 covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 covenant permitting such Indebtedness.
, (eB) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form event that Indebtedness meets the criteria of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares more than one of the same class types of Disqualified Stock or Preferred Stock will not be deemed Indebtedness permitted by this covenant to be an incurrence incurred, the Company, in its sole discretion, will classify such item of Indebtedness for purposes on the date of this Section 4.07; provided, in each incurrence (or later reclassify such case, that Indebtedness from or after the first date on which the Company or its Restricted Subsidiaries could have incurred such Indebtedness under one or more other of such provisions) and only be required to include the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount and type of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that one or more of such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit provisions as it determines; and (yC) the amount that may be drawn under such letter of credit.
(h) The amount of any Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Range Energy I Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), the Issuer will not issue any Acquired Debt Disqualified Stock, and the issuance Issuer will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Stock); provided, unless however, that the Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if, for the most recently ended Test Period immediately preceding the date on which such additional Indebtedness is incurred by the Company or any Guarantor and, in each casesuch Disqualified Stock is issued, the Company’s Consolidated Fixed Charge Coverage Ratio for would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding net proceeds therefrom), as if the incurrence additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1Test Period.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):) or the issuance of any Disqualified Stock described below:
(1) Indebtedness of the Company incurrence by the Issuer or any Guarantors of its Restricted Subsidiaries of Indebtedness (whether as borrowers or guarantorsincluding guarantees and letters of credit) under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Subsidiaries thereunder) and then outstanding at any one time does not to exceed the greater of (xa) $1,000.0 100.0 million and (yb) the sum of $650.0 million and 25.0(x) 85.0% of Adjusted Consolidated Net Tangible Assetsthe book value of the receivables of the Issuer and its Restricted Subsidiaries plus (y) 65.0% of the book value of inventory of the Issuer and its Restricted Subsidiaries;
(2) the incurrence by the Issuer and the Guarantors of Indebtedness of represented by the Company or any Guarantor pursuant to Initial Notes and the Notes (excluding any Additional Notes) and any Guarantee of the Notesrelated Note Guarantees;
(3) Indebtedness the incurrence by the Issuer or its Restricted Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, Existing Indebtedness other than Indebtedness described in clauses (1) and not otherwise referred to in (2) of this Section 4.07(b4.09(b);
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Finance Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other assets used in the business of the Issuer or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $45.0 million and (b) 4.5% of the Issuer’s Consolidated Total Assets determined at the time of such incurrence;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to, extend, refinance, renew, replace, defease or refund Indebtedness that was permitted by this Indenture to be incurred (or Disqualified Stock permitted to be issued) under Section 4.09(a) hereof or clauses (2), (3), (4), (12), (13), (18) or (23) of this Section 4.09(b) or this subclause 4.09(b)(5);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that that:
(A) if the Issuer is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Issuer nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary thereof of the Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Issuer nor a Restricted Subsidiary thereof, shall of the Issuer will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4subclause 4.09(b)(6);
(57) guarantees of any Indebtedness of the Company incurrence by the Issuer or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary Hedging Contracts in the ordinary course of business and (b) other letters of creditnot for speculative purposes, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such including any obligations with respect to letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not issued in connection with therewith;
(8) the borrowing guarantee by the Issuer or any of money its Restricted Subsidiaries of Indebtedness of the Issuer or the obtaining any of advances or creditits Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(9) Indebtedness of the Company incurrence by the Issuer or any of its Restricted Subsidiary with respect to Subsidiaries of obligations relating to oil or gas net Hydrocarbon balancing positions arising in the ordinary course of business;
(10) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company Issuer and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Issuer or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(11) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of any Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer; and
(B) any sale or other transfer of any such Disqualified Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, shall be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this subclause 4.09(b)(11);
(12) the incurrence or issuance by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness or Disqualified Stock of the Issuer or a Restricted Subsidiary incurred to finance an acquisition and (b) Acquired Debt incurred by the Issuer or a Restricted Subsidiary, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof or (ii) the Fixed Charge Coverage Ratio for the Issuer would not be less than immediately prior to such transactions;
(13) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock, provided that, after giving effect to any such incurrence or issuance, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred pursuant to subclause (5) of this Section 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred or Disqualified Stock issued under this clause (13), does not exceed the greater of $60.0 million and 5.5% of the Issuer’s Consolidated Total Assets;
(14) Indebtedness incurred by the Issuer or any Restricted Subsidiary of the Issuer to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes pursuant to Article Eight or Article Elevenin accordance with this Indenture;
(1115) Indebtedness of the Company Issuer or any Restricted Subsidiary arising from agreements for indemnification of the Issuer consisting of obligations to pay insurance premiums or purchase price adjustment take-or-pay obligations or similar obligationscontained in supply arrangements incurred in the ordinary course of business;
(16) Indebtedness in respect of any bankers’ acceptance, earn-outs or other similar obligations or from guarantees or letters bank guarantees, letter of credit, surety bonds warehouse receipt or performance bonds securing any obligation similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(17) Note Guarantees (a) incurred in the Company ordinary course of business in respect of obligations of (or a Restricted Subsidiary pursuant to such an agreementto) suppliers, customers, franchisees, lessors and licensees that, in each case incurred case, are non-Affiliates or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;(b) otherwise constituting Investments not prohibited under this Indenture,
(1218) Permitted Refinancing Indebtedness issued by the Issuer or any of its Restricted Subsidiaries to any current, future or former director, officer, consultant or employee of the Company Issuer, the Issuer, any other direct or indirect parent of the Issuer or any Restricted Subsidiary issued in exchange forof the Issuer (or any of their Affiliates), or their estates or the net proceeds beneficiaries of which are used such estates to renewfinance the purchase, extendredemption, substituteacquisition or retirement for value of Equity Interests permitted by Section 4.07(b)(5) hereof, defease, refund, refinance or replace, in an aggregate principal amount at any Indebtednesstime outstanding, including any Disqualified Stock, all Permitted Refinancing Indebtedness incurred pursuant to paragraph subclause (a5) of this Section 4.07 and clauses 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (218), (3)not to exceed the amount of Equity Interests permitted to be purchased, (12redeemed, acquired or retired pursuant to Section 4.07(b)(5) and (13) of this Section 4.07(b)hereof;
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(1419) Indebtedness of incurred in connection with any Sale and Leaseback Transaction not relating to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, Principal Properties and any renewalsrefinancing, extensionsrefunding, substitutions, refinancings renewal or replacements extension of any such Indebtedness, so long as provided that, except to the aggregate extent otherwise permitted hereunder, the principal amount of all any such Indebtedness is not increased above the principal amount thereof outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07immediately prior to such refinancing, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07refunding, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all renewal or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount extension and the payment of interest on any Indebtedness in the form of additional Indebtedness direct and contingent obligors with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant respect to such Indebtedness are not changed;
(20) Indebtedness in respect of overdraft facilities, employee credit card programs and such letter other cash management arrangements in the ordinary course of credit shall be equal business;
(21) Indebtedness representing deferred compensation to the greater of (x) the principal employees of the Indebtedness so secured by such letter Issuer (or any direct or indirect parent of credit the Issuer) and (y) its Restricted Subsidiaries incurred in the amount that may be drawn under such letter ordinary course of credit.business;
(h22) The amount Indebtedness in respect of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.Treasury Management Arrangements; and
Appears in 1 contract
Sources: Indenture (LSB Industries Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will ▇▇▇▇ Las Vegas shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), or (ii) issue any Acquired Debt and the issuance of Disqualified Stock). Notwithstanding the foregoing, unless such ▇▇▇▇ Las Vegas and its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio of ▇▇▇▇ Las Vegas for the ▇▇▇▇ Las Vegas’ most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be (the “Reference Period”) would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds from the Indebtedness, as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations), to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (xi) $1,000.0 million and 1.0 billion less (yii) the sum aggregate amount of $650.0 million all Net Proceeds of Assets Sales applied by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under the Credit Agreement or repay any revolving credit Indebtedness under the Credit Agreement and 25.0% effect a corresponding permanent reduction of Adjusted Consolidated Net Tangible Assetscommitments thereunder pursuant to Section 4.10 hereof or otherwise;
(2) Indebtedness the incurrence by the Issuers and the Restricted Subsidiaries of ▇▇▇▇ Las Vegas of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under this Section 4.07(b4.09(a), under clauses (2), (7), (8), (9), (12), (13) or (14) of this Section 4.09(b), or under this clause (3);
(4) incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company ▇▇▇▇ Las Vegas and any of its Restricted Subsidiaries; provided, however, that:
(A) if ▇▇▇▇ Las Vegas or any Guarantor is the obligor on such Indebtedness and the payee is not ▇▇▇▇ Las Vegas or a Guarantor, such Indebtedness must be expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of ▇▇▇▇ Las Vegas, or its Note Guarantee under this Indenture, in the case of a Guarantor, except that no Indebtedness of ▇▇▇▇ Las Vegas or any Guarantor shall be deemed to be subordinated in right of payment to any other Indebtedness of ▇▇▇▇ Las Vegas or any such Guarantor solely by virtue of being unsecured; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company ▇▇▇▇ Las Vegas or a Restricted Subsidiary thereof thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither ▇▇▇▇ Las Vegas nor a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company ▇▇▇▇ Las Vegas or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business;
(6) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness solely in respect of performance, and (c) obligations pursuant to hedging arrangements (includingsurety, without limitationappeal or similar bonds or commercial or standby letters of credit, swaps, caps, floors, collars, options and similar agreements) entered into so long as such Indebtedness is incurred in the ordinary course of business for and the purpose aggregate amount of mitigating against risks encountered in a Permitted Businessall such bonds and standby letters of credit is not greater than $60.0 million at any time outstanding;
(7) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development equipment (including acquisitions of property Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the business Projects by ▇▇▇▇ Las Vegas or any of the Company or its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding ), not to exceed $100.0 million at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary under (a) one Subsidiaries of Indebtedness in a principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by discharge any Indebtedness incurred pursuant to this clause (8), upon not to exceed, at any time, 75% of the drawing aggregate cost of such letters the Phase III Project to pay the costs and expenses of credit or other instrumentdesigning, such obligations are reimbursed within 60 days following such drawing; provideddeveloping and constructing the Phase III Project, further, that with respect so long as the Holders continue to clauses (a) and (b), such Indebtedness is not have a perfected first priority security interest in connection with the borrowing of money or the obtaining of advances or creditGolf Course Land;
(9) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of the Company Equity Interests of Wynn Resorts or any Restricted Subsidiary with respect permitted pursuant to obligations relating to oil or gas balancing positions arising in the ordinary course clause (6) of businessSection 4.07(b) hereof;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven[intentionally omitted];
(11) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligationsSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant not to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryexceed $100.0 million;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)2014 Notes;
(13) if the Company could incur $1.00 2017 Notes;
(14) the Notes;
(15) the incurrence of Indebtedness (and the Guarantee of such Indebtedness by ▇▇▇▇ Las Vegas) in an amount not to exceed 100% of the Fair Market Value of the Aircraft, which is secured only by Liens permitted by clause (26) of the definition of “Permitted Liens;”
(16) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness pursuant (so long as such Indebtedness is incurred under the Credit Agreement, through the issuance of Additional Notes under this Indenture, is unsecured Indebtedness or is Permitted Junior Debt) to paragraph be used to develop and construct an Additional Entertainment Facility and/or a Retail Facility on land included in the Projects in an aggregate principal amount (aor original accreted value, as applicable) at any time not to exceed 662/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility; provided that, subsequent to the date of this Section 4.07 after giving effect Indenture and on or prior to the date of the incurrence of such incurrenceIndebtedness, Acquired Debtnet cash proceeds have been received by ▇▇▇▇ Las Vegas as a contribution to its common equity capital in an amount equal to at least 331/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility, which proceeds have been irrevocably committed at the time of such contribution for use in the development and construction of such Additional Entertainment Facility and/or a Retail Facility; and
(1417) the incurrence by ▇▇▇▇ Capital, as co-obligor, of any Indebtedness of which ▇▇▇▇ Las Vegas is permitted to incur pursuant to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsforegoing provisions.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in (1) through (16) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers shall be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application of proceeds of Notes), date on which the Issue Date, Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, authenticated under this Indenture shall initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (bSection 4.09(b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual hereof. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries may incur pursuant to this Section 4.07; provided4.09 shall not be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, any Indebtedness which is permitted to be incurred by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries under clause (7) set forth above may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount;
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate Indebtedness, in effect on the date that such Indebtedness was incurred.case of any other Indebtedness; and
(g3) If in respect of Indebtedness is of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xA) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hB) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Wynn Resorts LTD)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Grove Investors shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), "INCUR") any Indebtedness (including Acquired Debt) and that Grove Investors shall not issue any Acquired Debt Disqualified Stock and the issuance shall not permit any of its Subsidiaries to issue any shares of Disqualified Stock); PROVIDED, unless such HOWEVER, that the Issuers may incur Indebtedness is incurred by (including Acquired Debt) or issue shares of Disqualified Stock and Grove Investors' Subsidiaries may incur Indebtedness or issue preferred equity if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Grove Investors' most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four quarter period. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”"PERMITTED DEBT"):
(1i) the incurrence by the Issuers and their Restricted Subsidiaries of Indebtedness under the New Credit Facility; PROVIDED that the aggregate principal amount of all term Indebtedness outstanding under the New Credit Facility after giving effect to such incurrence does not exceed an amount equal to $200.0 million plus (in the case of any refinancing thereof) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing less the aggregate amount of all scheduled or mandatory repayments of the Company principal of any term Indebtedness under the New Credit Facility (other than repayments that are immediately reborrowed) that have been made since the date of this Indenture;
(ii) the incurrence by an Issuer and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities; PROVIDED that the aggregate principal amount of all revolving credit Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum face amount thereunder) outstanding under all Credit Facilities after giving effect to such incurrence does not exceed an amount equal to the greater of (A) the amount of the Borrowing Base and (B) $125.0 million, less, in the case of clause (B), the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce revolving credit commitments under the Credit Facility pursuant to Section 4.10 hereof;
(iii) the incurrence by Grove Investors and its Restricted Subsidiaries of the Existing Indebtedness;
(iv) (A) the incurrence by the Issuers of Indebtedness represented by the Debentures sold in the Offering, (B) the incurrence by Holdings and Holdings Capital of Indebtedness represented by the Holdings Debentures and (C) the incurrence by Grove and Grove Capital of Indebtedness represented by the Senior Subordinated Notes and the incurrence by the Subsidiary Guarantors (as defined in the Senior Subordinated Note Indenture) of Indebtedness represented by the guarantees of such Senior Subordinated Notes;
(v) the incurrence by Grove Investors or any Guarantors (whether as borrowers of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or guarantors) under one purchase money obligations or more Credit Facilities similar financings, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Grove Investors or such Restricted Subsidiary, in an aggregate principal amount not to exceed $20.0 million at any time outstanding;
(vi) the incurrence by Grove Investors or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Subsidiary; PROVIDED that such Indebtedness was incurred by the prior owner of such assets or such Subsidiary prior to such acquisition by Grove Investors or one time of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by Grove Investors or one of its Restricted Subsidiaries; and PROVIDED further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding under Indebtedness incurred pursuant to this clause (1vi) and any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (vi), does not exceed $10.0 million;
(vii) the incurrence by Grove Investors or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to exceed refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the greater of first paragraph hereof or clauses (iii), (iv), (v), (vi) or (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsthis paragraph;
(2viii) Indebtedness of the Company incurrence by Grove Investors or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness its Restricted Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company Grove Investors and any of its Restricted Wholly Owned Subsidiaries, including a pledge of assets in connection therewith; providedPROVIDED, howeverHOWEVER, that (i) if one of the Issuers is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Debentures and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Grove Investors or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Grove Investors or a Wholly Owned Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Grove Investors or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4viii);
(5ix) guarantees of any Indebtedness of the Company incurrence by Grove Investors or any of its Restricted Subsidiaries which of Hedging Obligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be incurred under this Indenture;
outstanding, (6ii) Indebtedness the value of the Company foreign currencies purchased or any received by Grove Investors or its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Subsidiaries in the ordinary course of business, and business as conducted by Grove Investors or its Restricted Subsidiaries or (ciii) obligations pursuant commodity risk relating to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) commodity agreements to the extent entered into in the ordinary course of business for to protect Grove Investors and its Restricted Subsidiaries from fluctuations in the purpose prices of mitigating against risks encountered raw materials used in a Permitted Businessits business;
(7x) Indebtedness of the Company incurrence by Grove Investors or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Subsidiaries of additional Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7x), not to exceed $80.0 million;
(xi) outstanding at the incurrence by Grove Investors' Unrestricted Subsidiaries of Non-Recourse Debt, PROVIDED, HOWEVER, that if any time such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Grove Investors that was not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under by this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedxi);
(8) xii) the Guarantee by the Issuers or any of their Restricted Subsidiaries of Indebtedness of Grove Investors or a Subsidiary of Grove Investors, which Indebtedness was permitted to be incurred by another provision of this Section 4.09;
(xiii) the Company or any Restricted Subsidiary under incurrence of Indebtedness (a) one or more standby including letters of credit issued credit) in respect of workers' compensation claims, self insurance obligations, performance, surety, bid or similar bonds and completion guarantees provided by or for the account of the Company Grove Investors or a Restricted Subsidiary in the ordinary course of business and consistent with past practices;
(bxiv) other letters the incurrence of creditIndebtedness, suretyincluding Guarantees, bid, performance, appeal by Grove Investors or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing any of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not its Restricted Subsidiaries in connection with the borrowing of money or the obtaining of advances or credita Dealer Financing Program;
(9xv) the incurrence of Equipment Financing Guarantees; and
(xvi) the incurrence of Indebtedness arising from agreements of the Company Grove Investors or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course providing for indemnification, adjustment of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the disposition or acquisition or disposition of any business, assets or Capital Stock of a Subsidiary; PROVIDED that the maximum aggregate liability of such Indebtedness shall at no time exceed the gross proceeds actually received by Grove Investors and its Restricted Subsidiary or a Person that, contemporaneously Subsidiaries in connection with any such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, disposition or the net gross proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, actually paid by Grove Investors and its Restricted Subsidiaries in connection with any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) acquisition. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09, the Company Issuers shall, in its their sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09. Accrual of interest, accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; providedPROVIDED, in each such case, that the amount thereof is included in Fixed Charges of Grove Investors as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Companyaccrued.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt Indebtedness and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur on or after the Issue Date each and all of the following (collectively, the “Permitted DebtIndebtedness”):
(1) Indebtedness of the Company or any ▇▇▇▇▇ ▇▇▇▇▇ GP (and guarantees by Guarantors (whether as borrowers or guarantorsof such Indebtedness) under one or more the Revolving Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (xi) $1,000.0 245.0 million and (ii) (x) 85% of accounts receivable of the Company and its Restricted Subsidiaries as of the end of the most recently ended fiscal quarter for which consolidated financial statements are available, plus (y) the sum of $650.0 million and 25.080% of Adjusted Consolidated Net Tangible Assetsinventory of the Company and its Restricted Subsidiaries as of the end of the most recently ended fiscal quarter for which consolidated financial statements are available, less, in the case of clause (i) and clause (ii), without duplication, the amount of any permanent repayments thereof or permanent reductions in commitments thereunder from the proceeds of one or more Asset Sales which are used to prepay or repay the Revolving Credit Agreement, pursuant to clause (b)(1) of Section 4.11 hereof;
(2) Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor pursuant to (a) the Notes (excluding any Additional Notes) and any Guarantee of the Notes, (b) any Exchange Notes issued in exchange for the Notes pursuant to the Registration Rights Agreement and any Guarantee of the Exchange Notes;
(3) Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Restricted Subsidiary Guarantor outstanding on the Issue Date, including the Existing Notes, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Indebtedness;”
(4) 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 that:
(a) if the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company or ▇▇▇▇▇ ▇▇▇▇▇ GP, or the Guarantee, in the case of a Subsidiary Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale disposition, pledge or other transfer of any such Indebtedness to a Person that is not either (other than a disposition, pledge or transfer to the Company or a Restricted Subsidiary thereofor a disposition, pledge or transfer under the Revolving Credit Agreement or the Term Loan Agreement and these Notes) of any such Indebtedness, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Subsidiary Guarantor or ▇▇▇▇▇ ▇▇▇▇▇ GP of Indebtedness of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any of its Restricted Subsidiaries the Subsidiary Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness obligations of the Company Company, ▇▇▇▇▇ ▇▇▇▇▇ GP, or any Restricted Subsidiary that constitutes Guarantor not entered into for speculative purposes
(a) obligations pursuant to Interest Rate AgreementsAgreements designed to manage interest rates in respect of Indebtedness of the Company, but only to ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor as long as the extent notional amounts of such obligations do not, on a net basis, not exceed 105% of the aggregate principal amount of the such Indebtedness covered by such Interest Rate Agreements; then outstanding,
(b) obligations under currency exchange contracts and related hedging arrangements entered into in any Currency Hedging Agreements, relating to (1) Indebtedness of the ordinary course of businessCompany, and ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor and/or (c2) obligations pursuant to hedging arrangements (includingpurchase or sell assets or properties, without limitationin each case, swaps, caps, floors, collars, options and similar agreements) entered into incurred in the ordinary course of business for of the purpose Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor; provided, however, that such Currency Hedging Agreements do not increase the Indebtedness or other obligations of mitigating against risks encountered the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder or
(c) under any Commodity Price Agreements which do not increase the amount of Indebtedness or other obligations of the Company, ▇▇▇▇▇ ▇▇▇▇▇ GP or any Subsidiary Guarantor outstanding other than as a Permitted Businessresult of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable thereunder;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7), together with any Refinancing Indebtedness (including in the form of Additional Notes) outstanding at any time shall incurred in respect thereof, not to exceed the greater of (x) $25.0 15 million and (y) 1.56% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of , outstanding at any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedtime;
(8) Indebtedness of the Company or any Restricted Subsidiary under arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (aexcept in the case of daylight overdrafts) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary drawn against insufficient funds in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawingbusiness; provided, furtherhowever, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditextinguished within five Business Days after incurrence;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to as described below under Article Eight or Article ElevenTwelve hereof;
(1110) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary Subsidiary; provided that the maximum assumable liability in respect of all such obligations shall at no time exceed the gross proceeds actually paid or a Person that, contemporaneously with such acquisition or disposition, becomes a received by the Company and any Restricted Subsidiary, including the Fair Market Value of non-cash proceeds;
(1211) Permitted any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, “Refinancing Indebtedness Indebtedness”) of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Capital Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), ) and (3)) of this paragraph (b) of this definition of “Permitted Indebtedness,” including any successive refinancings so long as the borrower under such refinancing is the Company (which may be a borrower together with ▇▇▇▇▇ ▇▇▇▇▇ GP or one or more co-obligors which are also Subsidiary Guarantors) or, if not the Company, one or more Subsidiary Guarantors or ▇▇▇▇▇ Reade GP if the Indebtedness being refinanced is of a Subsidiary Guarantor or ▇▇▇▇▇ ▇▇▇▇▇ GP, and the aggregate principal amount of Indebtedness represented thereby (or if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness plus any accreted value attributable thereto since the original issuance of such Indebtedness) is not increased by such refinancing plus the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing and (1) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, such new Indebtedness is made subordinated in right of payment to the Notes or Guarantee, as the case may be, at least to the same extent as the Indebtedness being refinanced and (2) in the case of Pari Passu Indebtedness or Subordinated Indebtedness, as the case may be, such refinancing does not reduce the Average Life to Stated Maturity or the Stated Maturity of such Indebtedness or has a Stated Maturity later than that of the Notes;
(12) Indebtedness in respect of bid, performance, surety bonds and workers’ compensation claims, self-insurance obligations and bankers acceptances issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations of the Company or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance, surety bonds and workers’ compensation claims, self-insurance obligations and bankers acceptances; provided that, in each case contemplated by this clause (13) 12), upon the drawing of this Section 4.07(b)such instrument, such obligations are reimbursed within 30 days following such drawing;
(13) Acquired Indebtedness, if (x) the Company could incur $1.00 Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available after giving pro forma effect to the relevant acquisition and incurrence of such Acquired Indebtedness as of the beginning of such four quarter period would be not less than (y) the Company’s Consolidated Fixed Charge Coverage Ratio for such four quarter period as of immediately prior to such acquisition and incurrence of such Acquired Indebtedness, and any refundings or refinancings of such Acquired Indebtedness, including additional Indebtedness pursuant incurred to paragraph pay premiums and fees in connection therewith, provided, however, that such refinancing Indebtedness: (a) does not reduce the Average Life to Stated Maturity or the Stated Maturity of this Section 4.07 after giving effect such Indebtedness, (b) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, is made subordinated in right of payment to such incurrencethe Notes or Guarantee, Acquired Debtas the case may be, at least to the same extent as the Indebtedness being refinanced; (c) shall not be in a principal amount in excess of the principal amount of, premium, if any, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced; and (d) where the Indebtedness being refunded or refinanced bears a fixed rate of interest, shall not bear interest at a fixed rate greater than the fixed rate of interest borne by the Indebtedness being refunded or refinanced;
(14) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; and
(1415) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (1314) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed $25 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness or portion thereof meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness or portion thereof as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Revolving Credit Facility Agreement which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereofDate in an amount not in excess of the amount permitted to be incurred pursuant to clause (1) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 above rather than paragraph (a) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Capital Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Capital Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Duane Reade)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”)" and correlatively, an "incurrence" of) any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company for the most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence would have been at least 2.0 to 1.0 determined on a Pro Forma Basis. The foregoing provisions shall not apply to:
(a) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness under the Senior Credit Facility and Guarantees thereof by the Guarantors so long as, immediately after any such incurrence, the aggregate principal amount outstanding under the Senior Credit Facility (together with any Permitted Refinancing Indebtedness incurred to refund, replace or refinance any Indebtedness incurred pursuant to the Senior Credit Facility) pursuant to this paragraph (a) does not exceed an amount equal to $200.0 million, less the aggregate amount of all Loan Reductions;
(b) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes and the Subsidiary Guarantees in an amount not to exceed $34.0 million;
(c) Guarantees by the Company or a Guarantor of Indebtedness incurred by the Company or a Restricted Subsidiary of the Company so long as the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.by the primary obligor thereon was permitted under the terms of this Indenture;
(bd) Notwithstanding the foregoing, incurrence by the Company and, to the extent specifically set forth below, the or a Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness Subsidiary of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) all such intercompany Indebtedness is expressly subordinate to the prior payment in full of all Obligations with respect to the Notes and the Subsidiary Guarantees and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such intercompany Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such intercompany Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not permitted by this clause (4d);
(5e) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred incurrence by the Company or any Restricted Subsidiary pursuant to this clause of Indebtedness (7including reimbursement obligations relating thereto) outstanding at any time shall not exceed the greater in respect of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Valuebid, as determined in accordance with the definition of such termpayment or performance bonds, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby bankers' acceptances, letters of credit issued by and surety or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion or guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters obligations of credit or other instrumentothers, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10f) Indebtedness the issuance by a Restricted Subsidiary of the Company of any shares of Preferred Stock to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that (i) all such Preferred Stock is expressly subordinate to the prior payment in full of all Obligations with respect to the Notes and the Subsidiary Guarantees and (ii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary arising from agreements for indemnification and (B) any sale or purchase price adjustment obligations transfer of any such shares of Preferred Stock to a Person that is not either the Company or similar obligationsa Restricted Subsidiary of the Company shall be deemed, earn-outs or other similar obligations or from guarantees or letters in each case, to constitute an issuance of credit, surety bonds or performance bonds securing any obligation such Preferred Stock by such Restricted Subsidiary that is not permitted by this clause (f);
(g) Hedging Obligations of the Company or a Restricted Subsidiary pursuant that are incurred (i) for the purpose of fixing or hedging interest rate risk with respect to such an agreement, any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (ii) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges or commodity price risk with respect to commodities utilized by the Company in each case incurred or assumed in connection with the acquisition or disposition ordinary course of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12h) Permitted Refinancing Indebtedness of subject to paragraph (a) above, the incurrence by the Company or any of its Restricted Subsidiary issued Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitute, defease, defease or refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant Indebtedness that was permitted by this Indenture to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)be incurred;
(13i) if the Company could incur $1.00 incurrence of additional Indebtedness pursuant to paragraph (abut excluding any funded Indebtedness) arising from agreements providing for indemnification, adjustment of this Section 4.07 after giving effect to such incurrencepurchase price or similar Obligations, Acquired Debt; and
(14) Indebtedness incurred or assumed in connection with the acquisition or disposition of any business by the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.Subsidiary;
Appears in 1 contract
Sources: Indenture (Metal Management Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of of, or otherwise incur, contingently or otherwise incur (collectively, “"incur”"), any Indebtedness (including any Acquired Debt Indebtedness and the issuance of Disqualified Stock), unless such Indebtedness is incurred by except that the Company or and any Guarantor andGuarantors may incur Indebtedness if, in each caseat the time of such event, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended immediately preceding four full fiscal quarters for which internal financial statements are available immediately preceding available, taken as one accounting period, would have been equal to at least 2.0 to 1.0.
(b) In making the foregoing calculation, pro forma effect will be given to: (i) the incurrence of such Indebtedness taken and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as one if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period; (ii) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period is as if such Indebtedness was incurred, repaid or retired at least equal the beginning of such four-quarter period; and (iii) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period; provided that, in the case of clause (iii), such adjustments in connection with any acquisition of any company, entity or business will be based on the financial statements or other information of the company, business or entity acquired, if available, as adjusted in the good faith judgment of the chief financial or accounting officer of the Company and set forth in an officers' certificate delivered to the Trustee to reflect the revenue per patient, cost and operating structure of the Company for similar assets or greater than 2.25:1businesses consistent with past practice. In making a computation under the foregoing clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and (C) the amount of any Indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).
(bc) Notwithstanding the foregoing, the Company andmay, to the extent specifically set forth below, the and may permit its Restricted Subsidiaries may to, incur each and all of the following Indebtedness (collectively, the “"Permitted Debt”Indebtedness"):
(1i) Indebtedness of the Company or any Guarantors Guarantor under a Credit Facility (whether as borrowers or guarantorsand the incurrence by any Guarantor of guarantees thereof) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets125 million;
(2ii) Indebtedness represented by the Initial Notes (other than the Additional Notes) and the Guarantees and the Exchange Notes and related guarantees issued in respect of the Initial Notes;
(iii) Existing Indebtedness not otherwise referred to in this definition of "Permitted Indebtedness";
(iv) the incurrence by the Company of Permitted Refinancing Indebtedness in exchange for, or the net cash proceeds of which are used to refund, refinance or replace, any Indebtedness that is permitted to be incurred under clause (ii) or (iii) above;
(v) Indebtedness owed by the Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or such Restricted Subsidiary); provided, however, that:
(A) any Indebtedness of the Company or any Guarantor pursuant owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the Notes shall become due and payable (whether at Stated Maturity, acceleration, or otherwise) to the Notes (excluding any Additional Notes) payment and any Guarantee performance of the Notes;Company's obligations under the Notes or the Guarantor's obligations under its Guarantee, as the case may be; and
(3B) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (ix) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (iiy) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4v);
(5vi) guarantees Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations incurred not for speculative purposes;
(vii) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, earn-outs, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(viii) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Sections 4.19 or 4.20 hereof;
(ix) 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; provided, however, that such Indebtedness is extinguished within five business days of incurrence;
(x) Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a such Restricted Subsidiary Subsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instrumentsbusiness; provided that, in each case contemplated by this clause (8)x), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9xi) the incurrence of Non-Recourse Indebtedness by Permitted Joint Ventures that are Restricted Subsidiaries;
(xii) obligations in respect of performance, bid and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; and
(xiii) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising not permitted by any other clause of this definition, in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, aggregate principal amount in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness calculated as of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all time such Indebtedness outstanding is incurred, not to exceed at any one time in outstanding the aggregate shall not exceed Consolidated EBITDA for the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsimmediately preceding four full fiscal quarters for which internal financial statements are available, taken as one accounting period.
(cd) For purposes of determining compliance with this Section 4.074.09, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Indebtedness permitted by this described in clauses (i) through (xiii) above, or is entitled to be incurred pursuant to Section 4.074.09(a) hereof, the Company in its sole discretion may, at any time, will be permitted to classify or, from time to time, reclassify all or any a portion of such item of Indebtedness and only be required to include on the amount date of its incurrence, or later reclassify all or a portion of such Indebtedness as one item of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under a the Credit Facility which was Agreement incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Closing Date shall be deemed to have been incurred pursuant to on the Closing Date in reliance on the exception provided by clause (1i) of paragraph (b) the definition of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Permitted Indebtedness.
(e) . Accrual of interest, accrual of dividends, accretion or amortization of original issue discount or other value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same termsIndebtedness, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07covenant; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) Ratio. The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Renal Care Group Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including any including, without limitation, Acquired Debt Indebtedness) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andand its Restricted Subsidiaries may incur Indebtedness, and the Company may issue Disqualified Stock, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0 at the time such additional Indebtedness is incurred or such Disqualified Stock is issued (such time being called the “Incurrence Time”), in each case as determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x1) $1,000.0 million 350,000,000 and (y2) the sum of $650.0 million and 25.020% of Adjusted the Company’s Consolidated Net Tangible AssetsAssets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available;
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, any Series B Notes issued in exchange for Series A Notes pursuant to an Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company is the obligor on such Indebtedness and the obligee is not a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (2) if a Guarantor is the obligor on such Indebtedness and the obligee is neither the Company nor a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Guarantor with respect to its Subsidiary Guarantee and (2)(i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and of the Company, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) thereof, including guarantees or obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations thereof with respect to letters of credit supporting such bid, performance or surety obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred other than for the purpose an obligation for money borrowed) or other forms of financing, refinancing, renewing, defeasing security or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted credit enhancement supporting performance obligations under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatservice contracts, in each case contemplated by this clause (8)case, upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10g) the guarantee by the Company of Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease any of its Restricted Subsidiaries or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreementSubsidiary, in each case case, that was permitted to be incurred or assumed in connection with the acquisition or disposition by another provision of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiarythis Section 4.09;
(12h) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clause (ab), (d) or (h) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13i) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired DebtPermitted Acquisition Indebtedness; and
(14j) other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) abovean aggregate principal amount that, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as when taken together with the aggregate principal amount of all such other Indebtedness outstanding at any one time in the aggregate shall incurred pursuant to this clause (j) and then outstanding, will not exceed the greater of (x1) $50.0 million 50,000,000 and (y2) 3.02.5% of Adjusted the Company’s Consolidated Net Tangible Assets.
Assets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available. The Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (cor by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of 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 Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (i) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior tocomplies with this Section 4.09, and outstanding on (after giving effect to the application such item of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Indebtedness will be deemed to have treated as having been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07such category.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12.5:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million 900.0 million, which amount shall be permanently reduced by the amount of Net Available Cash from Asset Sales applied by the Company or any Restricted Subsidiary thereof to permanently repay any such Indebtedness, and not subsequently reinvested in Additional Assets, to the extent permitted pursuant to Section 4.11 hereof, and (y) the sum of $650.0 million and 25.020.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes, and the related Exchange Notes and Guarantees to be issued pursuant to the Registration Rights Agreement;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness, and such Restricted Subsidiary is not a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of (i) any Indebtedness of the Company or any of its Restricted Subsidiaries the Guarantors which is permitted to be incurred under this IndentureIndenture and (ii) Indebtedness of Restricted Subsidiaries or joint ventures in which the Company or any Guarantor owns Capital Stock in an aggregate principal amount at any one time outstanding not to exceed $150.0 million;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsAgreements which constitute Indebtedness, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, which constitute Indebtedness, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business, in each case which constitute Indebtedness;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 100.0 million and (y) 1.52.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in accordance with the definition of such termgood faith, of the acquired or constructed asset or improvement so financed;
(8) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) above after giving effect to such Incurrence, Indebtedness of any Foreign Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided further that the principal amount of any Indebtedness permitted under this clause (8) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(9) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8)9), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(910) Indebtedness incurred by any Foreign Subsidiary solely for the working capital purposes of the Company such Foreign Subsidiary or any Restricted Subsidiary with respect to of its Subsidiaries;
(11) obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(1012) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes (or Exchange Notes, as applicable) pursuant to Article Eight or Article Eleven;
(1113) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously contemporaneous with such acquisition or disposition, becomes a Restricted Subsidiary;
(1214) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (1214) and (1315) of paragraph (b) of this Section 4.07(b)4.07;
(1315) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, (x) Acquired DebtDebt and (y) Indebtedness of any MLP Entity;
(16) a Qualified Exchangeable Sale; and
(1417) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (1316) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 100.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Except as provided in clause (b) of this Section 6.01 the Borrower shall not, and will shall not cause or permit any of its Restricted Material Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance of Borrower shall not issue any Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, Clause (a) of this Section 6.01 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the Company incurrence by the Borrower or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Material Subsidiary of unsecured Indebtedness in an aggregate principal amount at (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any one time outstanding under Indebtedness incurred pursuant to this clause (1i)) which does not exceed, as of the date of such incurrence, at any time outstanding $500,000,000; provided that such Indebtedness shall have (A) a final Stated Maturity of principal at least six months later than the Maturity Date (or, in the case of a letter of credit, an expiry date at least six months later than the Maturity Date) and (B) a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans; provided, further that no draw under a letter of credit by the beneficiary thereof (and resulting reimbursement obligation of the Borrower or any of its Material Subsidiaries in respect thereof) prior to such date shall be considered a violation of the requirement set forth in this clause (i) regarding the final Stated Maturity thereof;
(ii) unsecured subordinated Indebtedness or Disqualified Stock of the Borrower in an aggregate principal amount (or liquidation preference, as applicable) (including the aggregate principal amount (or liquidation preference, as applicable) of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock, as applicable, incurred pursuant to this subclause (iii)) at any time outstanding not to exceed the greater product of (a) $100.00 and (b) the number of Subscribers at such time; provided that such subordinated Indebtedness or Disqualified Stock, as applicable, shall have a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans and a final Stated Maturity of principal at least six months later than the Maturity Date;
(iii) the incurrence by the Borrower and its Material Subsidiaries of (x) $1,000.0 million the Existing Indebtedness, including pursuant to the January 2003 Financing Transactions (other than the borrowings described in clause (c) of the definition thereof) and (y) Indebtedness under the sum of Distribution and Credit Agreement in an aggregate principal amount not to exceed $650.0 million 150,000,000 (provided that Indebtedness incurred under the Distribution and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness Credit Agreement prior to the Closing Date that is repaid with proceeds of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue DateLoans promptly, and in any event not otherwise referred to in later than ten Business Days, following the Closing Date shall not count against this Section 4.07(b$150,000,000 amount);
(4iv) the incurrence by the Borrower and any Subsidiary Loan Party of Indebtedness represented by the New Senior Notes and any Guarantees thereof and any exchange notes and Guarantees thereof to be issued pursuant to the Registration Rights Agreement;
(v) the incurrence by the Borrower or any Material Subsidiary 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 acquisition, construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary, or of Indebtedness in connection with a sale and leaseback transaction permitted by Section 6.05(b), in an aggregate principal amount (and/or amount of Attributable Debt, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this subclause (v), not to exceed $100,000,000 at any time outstanding;
(vi) the incurrence by the Borrower or any Subsidiary Loan Party, or Material Subsidiary as applicable, of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness or the Existing 10% Notes) that was permitted to be incurred under subclauses (i), (ii), (iii), (iv), (v), (x), (xi), (xii), (xiii) or (xvi) of this clause (b);
(vii) the incurrence by the Borrower or any Material Subsidiary of intercompany Indebtedness between or among the Company Borrower and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(iA) if the Borrower or any Material Subsidiary is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Borrower Obligations and Guarantor Obligations; and
(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Borrower or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Borrower or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or such Restricted Material Subsidiary, as the case may be, that was not permitted by this clause subclause (4vii);
(5viii) guarantees of any Indebtedness of the Company incurrence by the Borrower or any Material Subsidiary of its Restricted Subsidiaries which is permitted to be Hedging Obligations incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10ix) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.076.01;
(x) Indebtedness the proceeds of which are utilized solely to finance working capital in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this subclause (x), not to exceed the lesser of (A) $50,000,000 and (B) 80% of Qualified Receivables;
(xi) from and after any Parent Company Merger, Indebtedness of Holdings in existence on the Revolving Credit Facility Closing Date;
(xii) any Qualified Sale and Leaseback Transaction, including an XM-4 Sale and Leaseback Transaction, and any Permitted Beneficial Interest Indebtedness;
(xiii) Satellite Vendor Indebtedness;
(xiv) any Indebtedness incurred hereunder and the Guarantee of such Indebtedness;
(xv) the incurrence by the Borrower of one or more MLB Letters of Credit in an aggregate face amount not to exceed $120,000,000 at any time for all such MLB Letters of Credit;
(xvi) the incurrence by the Borrower and each other Loan Party of the Revolving Credit Facility Obligations in an aggregate principal amount not to exceed $250,000,000 at any time; and
(xvii) the incurrence by the Borrower or any Material Subsidiary of unsecured Indebtedness undertaken in connection with the Merger or any Merger Related Event (including without limitation in connection with a change of control offer to security holders of the Borrower, any Material Subsidiary or Holdings, a change of control offer in connection with an XM-4 Sale and Leaseback Transaction or a waiver of any such change of control offer or right to receive the same), other than or in addition to Permitted Refinancing Indebtedness incurred for such purpose, in an aggregate principal amount (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xvii)) which does not exceed, as of the date of such incurrence, at any time outstanding $100,000,000; provided that such Indebtedness shall have a final Stated Maturity of principal at least six months later than the Maturity Date and a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans.
(c) The Borrower shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Credit Agreement Obligations on substantially identical terms; provided, in each such casehowever, that no Indebtedness of the amount thereof as accrued Borrower shall be included as required deemed to be contractually subordinated in the calculation right of payment to any other Indebtedness of the Consolidated Fixed Charge Coverage Ratio Borrower solely by virtue of the Company.
(f) being unsecured. For purposes of determining compliance with any dollar-denominated restriction on this Section 6.01, in the incurrence event that an item of Indebtedness denominated meets the criteria of more than one of the categories of Permitted Debt described in a foreign currencyclauses (i) through (xiv) above, the dollar-equivalent principal amount Borrower may, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section, and such item of Indebtedness incurred pursuant thereto shall will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed treated as having been incurred pursuant to only one of such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditclauses.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createdirectly or indirectly, create incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if:
(i) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, "Permitted Indebtedness"): (a) the “Permitted Debt”):
Indebtedness evidenced by the Notes; (1b) Indebtedness of the incurrence by the Company or any Guarantors (whether of its Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so long as borrowers or guarantors) under one or more Credit Facilities in an the aggregate principal amount of all Indebtedness outstanding under all Credit Facilities does not, at any one time outstanding under this clause (1) not to time, exceed the greater of (1) $225.0 million (or, if there is any permanent reduction in the aggregate principal amount permitted to be borrowed under the Credit Agreement, such lesser aggregate principal amount) and (2) an amount equal to the sum of (x) $1,000.0 50 million and plus (y) the sum of $650.0 million and 25.030% of Adjusted Consolidated Net Tangible Assets;
Assets determined after the incurrence of such Indebtedness (2including the application of the proceeds therefrom), (c) the guarantee by any Subsidiary Guarantor of any Indebtedness that is permitted by this Indenture to be incurred by the Company; (d) all Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee its Restricted Subsidiaries in existence as of the Notes;
date of this Indenture; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i1) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (2) (A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause ; (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guarantees, performance bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9) Indebtedness of the Company other than advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of business;
business and on terms and conditions which are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit guarantee or performance bond itself), not to exceed in the aggregate at any given time 5.0% of Total Assets; (10g) Indebtedness under Interest Rate Hedging Agreements entered into for the purpose of limiting interest rate risks, provided that the obligations under such agreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant and that the aggregate notional principal amount of such agreements does not exceed 105% of the principal amount of the Indebtedness to which such agreements relate; (h) Indebtedness under Oil and Gas Hedging Contracts, provided that such contracts were entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries; (i) the incurrence by the Company of Indebtedness not otherwise permitted to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes be incurred pursuant to Article Eight this paragraph, provided that the aggregate principal amount (or Article Eleven;
(11accreted value, as applicable) of all Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary incurred pursuant to such an agreementthis clause (i), together with all Permitted Refinancing Debt incurred pursuant to clause (j) of this paragraph in each case respect of Indebtedness previously incurred or assumed in connection with the acquisition or disposition of pursuant to this clause (i), does not exceed $10.0 million at any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
one time outstanding; (12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued Debt incurred in exchange for, or the net proceeds of which are used to renewrefinance, extend, substituterenew, defeasereplace, defease or refund, refinance or replace, any Indebtedness, Indebtedness that was permitted by this Indenture to be incurred (including any Disqualified Stock, Indebtedness previously incurred pursuant to paragraph this clause (aj)); (k) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted Subsidiary in addition to the ordinary course of business in connection with the obtaining of goods or services; (l) Indebtedness consisting of obligations in respect of purchase price adjustments, guarantees or indemnities in connection with the acquisition or disposition of assets; and (m) production imbalances that described in clauses (1) through (13) abovedo not, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in outstanding, exceed 2% of the aggregate Total Assets of the Company. The Company shall not exceed the greater permit any of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07its Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07however, the Company in its sole discretion may, at if any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of ceases to be Non-Recourse Debt, such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, event shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be constitute an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of by the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Range Resources Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor and, in each case, may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds therefrom, as if the additional Indebtedness or the Disqualified Stock had been incurred or issued at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding the foregoing, the Company and, to provisions of Section 4.09(a) hereof will not prohibit the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of the following (collectively, the “any item of Permitted Debt”):Indebtedness.
(1c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Subsidiary Guarantee on substantially identical terms; provided, however, that solely for the avoidance of doubt and without any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) other implication, no Indebtedness of the Company or any Guarantor pursuant will be deemed to the Notes (excluding be contractually subordinated in right of payment to any Additional Notes) and any Guarantee of the Notes;
(3) other Indebtedness of the Company such Person solely by virtue of being unsecured or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any by virtue of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, secured on a net junior priority basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(cd) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness or Disqualified Stock meets the criteria of more than one of the types categories contained in clauses (1) through (14) of Indebtedness permitted by this the definition of Permitted Indebtedness, or is entitled to be incurred pursuant to Section 4.074.09(a) hereof, the Company in its sole discretion may, at any time, will be permitted to classify or, from time to time, reclassify all or any a portion of such item of Indebtedness and only be required to include or Disqualified Stock on the amount date of its incurrence or issuance, or later reclassify all or a portion of such item of Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Disqualified Stock, in any manner that complies with this Section 4.09. Indebtedness under a Credit Facility which was incurred on or prior to, and Facilities outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, date on which Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall authenticated under this Indenture will initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Permitted Indebtedness.
(e) Accrual . The accrual of interest, the accumulation of dividends, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, terms and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation Consolidated Interest Expense of the Consolidated Fixed Charge Coverage Ratio Company as accrued. Notwithstanding any other provision of this Section 4.09, the Companymaximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(he) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the fair market value of such assets at a price less than the date of determination; and
(B) the amount of the liability thereof shall be determined Indebtedness of the other Person; and
(3) the principal amount of the Indebtedness, in accordance with GAAPthe case of any other Indebtedness.
Appears in 1 contract
Sources: Indenture (Holly Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including any including, without limitation, Acquired Debt Indebtedness) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andand its Restricted Subsidiaries may incur Indebtedness, and the Company may issue Disqualified Stock, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0 at the time such additional Indebtedness is incurred or such Disqualified Stock is issued (such time being called the “Incurrence Time”), in each case as determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x1) $1,000.0 million 75,000,000 and (y2) the sum of $650.0 million and 25.020% of Adjusted the Company’s Consolidated Net Tangible AssetsAssets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available;
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, any Series B Notes issued in exchange for Series A Notes pursuant to an Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, provided that (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Wholly Owned Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations thereof with respect to letters of credit supporting such bid, performance or surety obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred other than for an obligation for money borrowed);
(g) the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any another Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatSubsidiary, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, furthercase, that with respect was permitted to clauses (a) and (b), such Indebtedness is not in connection with the borrowing be incurred by another provision of money or the obtaining of advances or creditthis Section 4.09;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12h) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clause (ab), (d) or (h) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt4.09; and
(14i) any additional Indebtedness in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (i) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior tocomplies with this Section 4.09, and outstanding on (after giving effect to the application such item of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Indebtedness will be deemed to have treated as having been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07such category.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) under one or more Credit Facilities Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed at any time outstanding the greater of of: (x) $1,000.0 million 200,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness in accordance with Section 4.10 hereof and (y) an amount that does not cause the sum First Lien Leverage Ratio of $650.0 million and 25.0% the Company to exceed 2.75 to 1.00 determined on a pro forma basis (including the pro forma application of Adjusted Consolidated Net Tangible Assetsthe net proceeds therefrom);
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the First Lien Notes;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, or the Subsidiary Guarantees with respect to the Original Notes, and any Additional Notes issued in respect to any of the foregoing (including as PIK Interest thereon) in accordance with the terms hereof;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed at any time shall not exceed the greater of (x) outstanding $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed25,000,000;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), defease, (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 2% of the Company’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding;
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding and any guarantee thereof;
(m) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2m)), (3)collectively, (12) and (13) of this Section 4.07(b)in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(13n) if Acquired Indebtedness of a Subsidiary of the Company acquired after the Issue Date or a person merged into or consolidated with any member the Company or a Restricted Subsidiary after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Company could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrenceacquisition or other transaction;
(o) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(p) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(q) other than Indebtedness incurred pursuant to clauses (a), Acquired Debt(b), (d), (o) or (p) of the second paragraph of this Section 4.09, Indebtedness incurred in connection with the Permitted Closing Steps;
(r) a Capital Lease Obligation in connection with a Galileo Transaction; and
(14s) any vessel charter being treated as a finance or capital lease under IFRS; provided that if the Company or any Guarantor is an obligor with respect to any unsecured Indebtedness incurred under Credit Facilities pursuant to clauses (a), (l), (m)(i) or (n) of the second paragraph of this Section 4.09, then such Indebtedness must be expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as applicable. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (CGG Marine B.V.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Parent shall not, and will shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Parent shall not issue any Disqualified Stock and shall not permit any Restricted Subsidiary to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company Parent or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Parent’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, incurrence by the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company Parent or any Restricted Subsidiary of any of the following Indebtedness:
(i) Second Lien Notes (including additional Second Lien Notes issued in respect of interest paid in kind thereunder but excluding any other additional Second Lien Notes) and (ii) other Indebtedness outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4b) Hedging Obligations;
(c) Indebtedness represented by the Initial Notes or the Guarantees with respect to the Initial Notes;
(d) intercompany Indebtedness between or among the Company Parent and any of its Restricted SubsidiariesSubsidiary; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary thereof and (ii) Subsidiary, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Parent nor a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4d);
(5e) guarantees Indebtedness in respect of any Indebtedness bid, performance or surety bonds issued for the account of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company Parent or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company Parent or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(f) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company Parent or any Restricted Subsidiary Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (7) outstanding f), not to exceed $35,000,000 at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) g) the guarantee by the Parent of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company Parent or another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Guarantee, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(h) intercompany Indebtedness between or among the Parent and any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12i) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (a), defease, (c) and (i) of the second paragraph of this Section 4.09;
(j) Indebtedness of Restricted Subsidiaries (other than the Company or the Guarantors) in an aggregate principal amount not to exceed 2% of the Parent’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries (other than the Company or the Guarantors) then outstanding;
(k) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $50,000,000 at any one time outstanding and any guarantee thereof;
(l) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (al), collectively, in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(i) Indebtedness of this Section 4.07 the Parent or a Guarantor incurred to finance an acquisition or (ii) Acquired Indebtedness of a Subsidiary of the Parent acquired after the Issue Date or a person merged into or consolidated with any member of the Group after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event, in the case of each of clauses (2), (3), (12i) and (13ii), where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of this Section 4.07(b);
Default shall have occurred and be continuing and (13B) if the Company Parent could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrence, Acquired Debtacquisition or other transaction;
(n) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(o) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(p) a Capital Lease Obligation in connection with a Galileo Transaction;
(q) [reserved]; and
(14r) any Indebtedness arising under or as a result of a Permitted Investment effected pursuant to clause (h) of the Company definition thereof; provided that the amount of such Indebtedness incurred after the Issue Date, together with any Permitted Refinancing Indebtedness in respect thereof, that is recourse to the Parent or any Restricted Subsidiary of the Parent shall not at any time outstanding exceed $200,000,000 (or its equivalent in addition to that described in clauses (1) through (13) aboveanother currency or currencies), and any renewals, extensions, substitutions, refinancings or replacements less the amount of such Indebtedness, so long as Permitted Investment and the aggregate principal total amount of all such Indebtedness outstanding at any one time in Permitted Guarantees incurred pursuant to clause (d) of the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) definition thereof. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (k) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in Parent shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Debt) or issue any Disqualified Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt and the issuance Debt) or issue shares of Disqualified Stock)Stock if the Company's Debt to Cash Flow Ratio is greater than zero and less than or equal to (a) 5.0 to 1, unless if such Indebtedness incurrence is incurred by the Company on or any Guarantor andprior to June 1, 2001, and (b) 4.5 to 1, if such incurrence of issuance is after June 1, 2001, in each case, case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred at the beginning of the Company’s Consolidated Fixed Charge Coverage Ratio for the 's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) incurred. Notwithstanding the foregoing, neither the Company and, nor any of its Restricted Subsidiaries shall incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Restricted Subsidiary unless such Indebtedness is also contractually subordinated in right of payment to the extent specifically set forth belowNotes on substantially identical terms; provided, the Restricted Subsidiaries may incur each and all of the following (collectivelyhowever, the “Permitted Debt”):
(1) that no Indebtedness of the Company or any Guarantors Restricted Subsidiary shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such Restricted Subsidiary solely by virtue of being unsecured. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of any of the following items of Indebtedness (whether collectively, "Permitted Debt"):
(i) the incurrence by the Company of Indebtedness from a bank or other financial institution in an aggregate amount at any one time outstanding not to exceed the greater of (a) $25 million and (b) 80% of the face amount of all accounts receivable owned by the Company as borrowers of such date that are not more than 90 days past due;
(ii) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes and the Subsidiary Guarantees;
(iv) the incurrence by the Company or guarantorsany of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under one the first paragraph hereof or more Credit Facilities clauses (ii), (iii), (vi) or (vii) of this paragraph;
(v) the incurrence by the Company of Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) outstanding, not to exceed the greater of (x) $1,000.0 million and (y) 2.0 times the sum of $650.0 million the net cash proceeds received by the Company after the Closing Date as a capital contribution or from the issuance and 25.0% sale of Adjusted Consolidated Net Tangible Assets;
Equity Interests (2other than Disqualified Stock) Indebtedness to a Person that is not a Subsidiary of the Company to the extent that such net cash proceeds have not been used to make Restricted Payments pursuant to clause (c)(ii) of the first paragraph of Section 4.07 or any Guarantor pursuant clauses (ii), (iii) or (vi) of the second paragraph of Section 4.07 hereof or Investments described under clause (vi) of the definition of Permitted Investments; provided that such Indebtedness does not mature prior to the Notes (excluding any Additional Notes) and any Guarantee has a Weighted Average Life to Maturity greater than that of the Notes;
(3vi) Indebtedness the incurrence by the Company and its Restricted Subsidiaries of Vendor Debt; provided that the aggregate amount of such Vendor Debt does not exceed the sum of (a) 100% of the total cost of any digital loop carriers or switches acquired therewith and (b) 80% of the total cost of any other Telecommunications Equipment or Telecommunications Related Assets acquired therewith;
(vii) the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Indebtedness in connection with the Issue Dateacquisition of (a) a Person engaged in a Telecommunications Business or (b) Telecommunications Related Assets, which include contractual rights of entry, in each case in an aggregate amount not to exceed the product of $650 and not otherwise referred the number of acquired telephony or video subscribers (as stated in an Officers' Certificate delivered to in this Section 4.07(bthe Trustee);
(4viii) intercompany Indebtedness between or among the incurrence by the Company and or any of its Restricted SubsidiariesSubsidiaries of intercompany Indebtedness; provided, however, that (ia) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (iib) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4viii);
(5ix) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; and
(x) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only the Debt to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Cash Flow Ratio test set forth in the ordinary course first paragraph of business, and (c) obligations this Section 4.09 or pursuant to hedging arrangements any of clauses (including, without limitation, swaps, caps, floors, collars, options and similar agreementsi) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
through (7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactionsv) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7vii) outstanding at any time shall not exceed the greater of through (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aix) of this Section 4.07 4.09, which guarantee has the same ranking relative to the Notes and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long Guarantees as the aggregate principal amount of all such guaranteed Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) does. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described in clauses (i) through (ix) above as of the date of incurrence thereof or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09 as of the date of incurrence thereof, the Company shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include on the amount date of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided its incurrence in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) section. Accrual of interest, interest and accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectivelyin any such case, “"incur”)") any Indebtedness, any Indebtedness (including any Acquired Debt and the issuance Issuer will not, and will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock); provided, unless such however, that the Issuer and any of its Restricted Subsidiaries may incur Indebtedness is incurred by or issue Disqualified Stock immediately after and giving effect thereto (A) if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Issuer's most recently-recently ended four full fiscal quarters for which internal financial statements are publicly available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.25 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one four-quarter period is at least equal to and (B) no Default or greater than 2.25:1Event of Default shall have occurred and be continuing.
(b) Notwithstanding Section 6.10(a) will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness or the issuance of any Disqualified Stock described in paragraph (ix) below (collectively, the “"Permitted Debt”"):
(1i) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness, letters of guarantee, tender cheques and letters of credit under Credit Facilities and the Guarantees thereof; provided that the aggregate principal amount of all Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount Issuer and its Restricted Subsidiaries at any one time outstanding under this clause (1) (with letters of guarantee, tender cheques and letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (xA) $1,000.0 million 300 million, (B) the Borrowing Base and (yC) the sum of $650.0 million and 25.035% of Adjusted Consolidated Net Tangible Assets, and in the case of (B) and (C) above, determined as of the date on which such additional Indebtedness is incurred, and after giving effect to the incurrence of such Indebtedness (and including any assets acquired with such Indebtedness);
(2ii) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3iii) the incurrence by the Issuer and the Guarantors of Indebtedness of represented by the Company or any Restricted Subsidiary outstanding Notes to be issued on the Issue Date;
(iv) the incurrence by the Issuer or any Guarantor of Indebtedness and Obligations represented by Capital Lease Obligations, and 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, development or improvement of property, plant or equipment, including Facilities, used in the business of the Issuer or such Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this paragraph (iv), not otherwise referred to exceed $25 million;
(v) the incurrence by the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance, renew, defease, discharge or replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 6.10(a) or paragraphs (ii), (iii) (with respect to the Notes only) or (v) of this Section 4.07(b6.10(b);
(4vi) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that that
(iA) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary thereof and of the Issuer; and
(iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary thereof, shall of the Issuer; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4vi);
(5vii) guarantees of any Indebtedness of the Company incurrence by the Issuer or any Guarantor of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsHedging Obligations, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount such Hedging Obligations were incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditfor speculative purposes;
(9viii) the Guarantee by the Issuer or any Guarantor of Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company Issuer or a Restricted Subsidiary pursuant of the Issuer that was permitted to such an agreement, in each case be incurred by another provision of this covenant or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryrequired to be incurred by this Indenture;
(12ix) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.07covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued shall be included as required accrued;
(x) one or more standby letters of credit, Guarantees, completion bonds, performance bonds, bid bonds, appeal bonds or surety bonds or other reimbursement obligations, in each case, issued in the calculation ordinary course of business and not in connection with the borrowing of money or the obtaining of an advance or credit (other than advances or credit for goods and services in the ordinary course of business and on terms and conditions that are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit, Guarantee or completion, performance, bid, appeal or surety bond itself);
(xi) the incurrence by the Issuer or any Guarantor of Non-Recourse Purchase Money Debt;
(xii) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this paragraph (xii), not to exceed the greater of (A) $25 million and (B) 2.5% of Adjusted Consolidated Net Tangible Assets, determined as of the Consolidated Fixed Charge Coverage Ratio date of incurrence of such Indebtedness and after giving effect to such incurrence (including any assets acquired with such Indebtedness);
(xiii) Indebtedness of the CompanyIssuer, any Restricted Subsidiary or any Guarantor arising from the honouring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(xiv) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(xv) Indebtedness of the Issuer or any Restricted Subsidiary (including letters of credit), for the account of the Issuer or any such Restricted Subsidiary incurred in order to provide security for environmental reclamation obligations to governmental agencies, bankers' acceptances, workers' compensation claims, payment obligations in connection with self-insurance or similar statutory and other requirements in the ordinary course of business;
(xvi) Permitted Acquisition Indebtedness;
(xvii) customary indemnification, adjustment of purchase price or similar obligations, including title insurance, of the Issuer or any Restricted Subsidiary, in each case, incurred in connection with the acquisition or disposition of any assets of the Issuer or any such Restricted Subsidiary (other than Guarantees incurred by any Person acquiring all or any portion of such assets for the purpose of financing such acquisition); and
(xviii) a Guarantee by the Issuer or any Restricted Subsidiary in favour of lenders to an Unrestricted Subsidiary provided recourse on such Guarantee is limited to the pledge of Equity Interests in such Unrestricted Subsidiary.
(fc) For purposes of determining compliance with this Section 6.10.
(i) in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in paragraphs (i) through (xviii) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuer will be permitted to divide and classify (or later redivide, classify or reclassify) such item of Indebtedness in whole or in part in any manner that complies with this Section 6.10, including by allocation to more than one other type of Indebtedness;
(ii) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(iii) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP; and
(iv) Indebtedness of any Person existing at the time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred by the Issuer and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
(d) For purposes of determining compliance with any Canadian dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the Canadian dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable Canadian dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Canadian dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 6.10, the maximum amount of Indebtedness that the Issuer may incur pursuant to this Section 6.10 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(ge) If Neither the Issuer nor any Guarantor will incur any additional Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of such Person unless such additional Indebtedness is secured by a letter also contractually subordinated in right of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal payment to the greater Notes or the applicable Subsidiary Guarantee, as the case may be, on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of (x) the principal payment to any other Indebtedness solely by virtue of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditbeing unsecured.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createdirectly or indirectly, create incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”)") any Indebtedness, and neither the Company nor any Indebtedness (including Subsidiary Guarantor, if any, shall issue any Acquired Debt Disqualified Stock and the issuance Company shall not permit any of Disqualified Stock), unless such Indebtedness is incurred by its Restricted Subsidiaries (other than a Subsidiary Guarantor) to issue any shares of preferred stock to any Person other than the Company or any Guarantor and, in each case, a Wholly Owned Restricted Subsidiary of the Company’s Consolidated ; provided, however, that the Company and any Subsidiary Guarantor may incur Indebtedness or issue shares of Disqualified Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, the “"Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes Indebtedness"): (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred evidenced by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible AssetsNotes; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.54
Appears in 1 contract
Sources: Indenture (Belco Oil & Gas Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur“ incur ”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the ““ Permitted DebtDebt ”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; providedprovided , furtherfurther , that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, ““ incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the ““ Permitted Debt”):
(1i) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (xA) $1,000.0 million 200.0 million, which amount shall be permanently reduced by the amount of Net Available Cash from Asset Sales applied by the Company or any Restricted Subsidiary thereof to permanently repay any such Indebtedness, and not subsequently reinvested in Additional Assets, to the extent permitted pursuant to Section 4.11 hereof, and (yB) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible Assets, determined as of the date of the incurrence of such Indebtedness;
(2ii) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3iii) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of Permitted Debt;
(4iv) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor , such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, pursuant to an intercompany note in the form of Exhibit G hereto or pursuant to another agreement containing substantially the same subordination provisions as those contained in Section 2.01 of Exhibit G hereto; and
(B) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a pledge or a similar action under a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4iv);
(5v) guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of its Restricted Subsidiaries which that is permitted to be incurred under this Indenture;
(6vi) Indebtedness of the Company or any Restricted Subsidiary that constitutes constitutes: (aA) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate AgreementsAgreements not entered into for speculative purposes; (bB) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, ; and (cC) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating protecting, on a net basis, against price risks, basis risks, or other risks encountered in a Permitted the Oil and Gas Business;
(7vii) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7vii) outstanding at any time shall not to exceed the greater of (xA) $25.0 million and (yB) 1.52.5% of Adjusted Consolidated Net Tangible Assets; provided further that Assets outstanding at any time, determined as of the principal amount date of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedIndebtedness;
(8) viii) Indebtedness of the Company or any Restricted Subsidiary under in connection with (aA) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (bB) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8)viii), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (aA) and (bB), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9ix) Indebtedness of the Company or any Restricted Subsidiary with respect to that constitutes obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10x) Indebtedness of the Company to the extent the or any Guarantor provided that sufficient net proceeds thereof are promptly deposited to defease or satisfy all of the Notes pursuant to Article Eight or Article Eleven;
(11xi) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, business or assets of the Company or a Restricted Subsidiary or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12xii) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2ii), (3), (12iii) and this clause (13xii) of this Section 4.07(bparagraph (b);
(13xiii) if Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(xiv) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtand its Restricted Subsidiaries; and
(14xv) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1i) through (13xiv) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.05.0% of Adjusted Consolidated Net Tangible Assets, determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred on or prior to, and outstanding on (after giving effect to is in existence immediately following the application issuance of proceeds of the Initial Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (i) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1i) of paragraph (b) of this Section 4.07 above rather than paragraph (a) above or any other clause of this Section 4.07paragraph (b) above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (xi) the principal of the such Indebtedness so secured by such letter of credit and (yii) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Brigham Exploration Co)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including any including, without limitation, Acquired Debt Indebtedness) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andand its Restricted Subsidiaries may incur Indebtedness, and the Company may issue Disqualified Stock, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0 at the time such additional Indebtedness is incurred or such Disqualified Stock is issued (such time being called the “Incurrence Time”), in each case as determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x1) $1,000.0 million 250,000,000 and (y2) the sum of $650.0 million and 25.020% of Adjusted the Company’s Consolidated Net Tangible AssetsAssets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available;
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, any Series B Notes issued in exchange for Series A Notes pursuant to an Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, provided that (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Wholly Owned Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations thereof with respect to letters of credit supporting such bid, performance or surety obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred other than for an obligation for money borrowed);
(g) the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any another Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatSubsidiary, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, furthercase, that with respect was permitted to clauses (a) and (b), such Indebtedness is not in connection with the borrowing be incurred by another provision of money or the obtaining of advances or creditthis Section 4.09;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12h) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clause (ab), (d) or (h) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt4.09; and
(14i) any additional Indebtedness in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (i) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior tocomplies with this Section 4.09, and outstanding on (after giving effect to the application such item of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Indebtedness will be deemed to have treated as having been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07such category.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million €500,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness under Credit Facilities in accordance with Section 4.10 hereof and (y) the sum of $650.0 million and 25.010% of Adjusted the Company’s Consolidated Net Tangible Total Assets;
(2b) Existing Indebtedness;
(c) Hedging Obligations;
(d) Indebtedness of represented by the Company Original Notes or any Guarantor pursuant the Subsidiary Guarantees with respect to the Notes (excluding any Additional Notes) and any Guarantee of the Original Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed €50,000,000 at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clauses (ab), (d) and (j) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13k) if Indebtedness of Restricted Subsidiaries of the Company could incur $1.00 (other than Guarantors) in an aggregate principal amount not to exceed 5% of additional the Company’s Consolidated Total Assets minus the sum of all Indebtedness pursuant to paragraph of Restricted Subsidiaries of the Company (aother than Guarantors) of this Section 4.07 after giving effect to such incurrence, Acquired Debtthen outstanding; and
(14l) any additional Indebtedness of the Company or any Restricted Subsidiary Guarantor in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the an aggregate principal amount not in excess of all such Indebtedness outstanding €50,000,000 at any one time outstanding and any guarantee thereof. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or of 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 Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (CGG)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), other than Permitted Debt, and the issuance Company shall not issue, and shall not permit any of its Restricted Subsidiaries to issue, any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor and, in each case, Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding the foregoing, the Company and, The provisions of Section 4.03(a) shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities in an Facilities; provided, however, that, immediately after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not to exceed the greater of (xA) $1,000.0 500 million and (yB) the sum of $650.0 million and 25.035% of Adjusted Consolidated Net Tangible AssetsAssets at the time of incurrence;
(2) Indebtedness of the incurrence by the Company or any Guarantor pursuant to and the Notes (excluding any Additional Notes) Guarantors of Indebtedness represented by the Initial Securities and any Guarantee of the NotesSubsidiary Guarantees issued on the Issue Date;
(3) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Subsidiaries of Existing Indebtedness;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness, the net proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), (3), (4), (8) or (11) of this paragraph or incurred pursuant to Section 4.03(a);
(5) 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 (A) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Securities and the Subsidiary Guarantees, as the case may be, and (B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not then permitted by this clause (45);
(56) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used in the Permitted Business of the Company or a Restricted Subsidiary of the Company or incurred to extend, refinance, renew, replace, defease or refund any such purchase price or cost of construction, improvement or development, in an aggregate principal amount not to exceed $50 million at any time outstanding;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries which is permitted to be providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred under this Indenture;
(6) Indebtedness in connection with the disposition or acquisition of any business, assets or a Restricted Subsidiary of the Company or any business or assets of its Restricted Subsidiaries, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred Subsidiaries for the purpose purposes of financingfinancing such acquisition; provided, refinancinghowever, renewing, defeasing or refunding all or any part of that (A) such Indebtedness is not reflected on the purchase price or cost of acquisition, construction, improvement or development of property used in the business balance sheet of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the aggregate principal amount balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(9) the guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by any other provision of this Section 4.03; provided that the guarantee of any Indebtedness of a Restricted Subsidiary of the Company that ceases to be such a Restricted Subsidiary shall be deemed a Restricted Investment at the time such Restricted Subsidiary’s status terminates in an amount equal to the maximum principal amount so guaranteed, for so long as, and to the extent that, such guarantee remains outstanding;
(10) the issuance by a Restricted Subsidiary of the Company of Disqualified Stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such Disqualified Stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of Disqualified Stock by such Subsidiary that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business and under (bA) other documentary letters of credit, suretyor surety bonds or insurance contracts, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, which are to be repaid in each case contemplated by this clause (8), upon full not more than one year after the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), date on which such Indebtedness is not in connection with originally incurred to finance the borrowing purchase of money or the obtaining of advances or credit;
(9) Indebtedness of goods by the Company or any a Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
Company, (11B) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or standby letters of credit, surety bonds or performance bonds securing any obligation insurance contracts issued for the purpose of supporting (i) workers’ compensation or similar liabilities of the Company or any of its Restricted Subsidiaries or (ii) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries and (C) bid, advance payment and performance bonds and surety bonds or similar insurance contracts for the Company and its Restricted Subsidiaries, and refinancings thereof; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other provision of this covenant) in an aggregate principal amount (or accreted value, as applicable) not to exceed the greater of (A) $50 million at any one time outstanding and (B) 3.5% of Consolidated Tangible Assets as of any date of incurrence after giving pro forma effect to such incurrence and the application of proceeds therefrom.
(c) To the extent the Company’s Unrestricted Subsidiaries incur Non-Recourse Indebtedness and any such Indebtedness ceases to be Non-Recourse Indebtedness of such Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary pursuant of the Company that was subject to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;this covenant.
(12d) Neither the Company nor any Guarantor will incur any Indebtedness (including Permitted Refinancing Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary issued such Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in exchange for, right of payment to the Securities or the net proceeds of which are used to renewSubsidiary Guarantees, extendas the case may be, substituteon substantially identical terms; provided, defeasehowever, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) that no Indebtedness of the Company or any Restricted Subsidiary Person will be deemed to be contractually subordinated in addition right of payment to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements other Indebtedness of such Indebtedness, so long as the aggregate principal amount Person solely by virtue of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsbeing unsecured.
(ce) For purposes of determining compliance with this Section 4.074.03, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt set forth in Section 4.074.03(b) or is entitled to be incurred pursuant to Section 4.03(a), the Company will, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.03 and only such item of Indebtedness or a portion thereof may be required to include the amount of such Indebtedness classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of such types (the applicable clauses of Section 4.03(b) or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.03(a). Accrual of interest, the accretion or amortization of original issue discount accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.03.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If , in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is secured by incurred to refinance other Indebtedness denominated in a letter foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of credit that serves only such refinancing, such U.S. dollar-dominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being refinanced. Notwithstanding any other provision of credit shall be equal to this covenant, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company may incur pursuant to this covenant shall not be deemed to be exceeded solely as a price less than result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred in a different currency from the liability thereof Indebtedness being refinanced, shall be determined calculated based on the currency exchange rate applicable to the currencies in accordance with GAAPwhich such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: Amended First Supplemental Indenture (Key Energy Services Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Debt) and that the Company shall not issue any Disqualified Stock and shall not permit any of its Subsidiaries to issue any shares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt Debt) or issue shares of Disqualified Stock and the issuance of Disqualified Stock), unless such Company's Subsidiaries may incur Indebtedness is incurred by or issue preferred equity if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four quarter period. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “"Permitted Debt”"):
(1i) the incurrence by the Issuers and the Subsidiary Guarantors of Indebtedness under the New Credit Facility; provided that the aggregate principal amount of all term Indebtedness outstanding under the New Credit Facility after giving effect to such incurrence does not exceed an amount equal to $200.0 million plus (in the case of any refinancing thereof) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing less the aggregate amount of all scheduled or mandatory repayments of the principal of any term Indebtedness under the New Credit Facility (other than repayments that are immediately reborrowed) that have been made since the date hereof;
(ii) the incurrence by an Issuer and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities; provided that the aggregate principal amount of all revolving credit Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum face amount thereunder) outstanding under all Credit Facilities after giving effect to such incurrence does not exceed an amount equal to the greater of (A) the amount of the Borrowing Base and (B) $125.0 million less, in the case of clause (B), the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce revolving credit commitments under a Credit Facility pursuant to Section 4.10 hereof;
(iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by the Issuers of Indebtedness represented by the Notes sold in the Offering and the incurrence by the Subsidiary Guarantors of Indebtedness represented by the Subsidiary Guarantees of such Notes;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations or similar financings, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities such Restricted Subsidiary, in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 10.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsat any time outstanding;
(2vi) Indebtedness of the incurrence by the Company or any Guarantor of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of it Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to the Notes this clause (excluding any Additional Notesvi) and any Guarantee of the NotesPermitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (vi), does not exceed $10.0 million;
(3vii) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under the first paragraph hereof or clauses (iii), (iv), (v), (vi) or (x) of this Section 4.07(b)paragraph;
(4viii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Wholly Owned Subsidiaries, including a pledge of assets in connection therewith; provided, however, that (i) if one of the Issuers is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4viii);
(5ix) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries which of Hedging Obligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be incurred under this Indenture;
outstanding , (6ii) Indebtedness the value of foreign currencies purchased or received by the Company or any its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Subsidiaries in the ordinary course of business, and business as conducted by the Company or (ciii) obligations pursuant commodity risk relating to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) commodity agreements to the extent entered into in the ordinary course of business for to protect the purpose Company and its Restricted Subsidiaries from fluctuations in the prices of mitigating against risks encountered raw materials used in a Permitted Businessits business;
(7x) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may include Senior Debt) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (x), not to exceed $25.0 million;
(xi) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xi);
(xii) the Guarantee by the Issuers or any of the Subsidiary Guarantors of Indebtedness of the Company or any Restricted a Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisitionCompany, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount which Indebtedness was permitted to be incurred by the Company or any Restricted Subsidiary pursuant to another provision of this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedSection;
(8) xiii) the incurrence of Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby including letters of credit issued credit) in respect of workers' compensation claims, self insurance obligations, performance, surety, bid or similar bonds and completion guarantees provided by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and consistent with past practices;
(bxiv) other letters the incurrence of creditIndebtedness, suretyincluding Guarantees, bid, performance, appeal by the Company or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing any of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not its Restricted Subsidiaries in connection with the borrowing of money or the obtaining of advances or credita Dealer Financing Program;
(9xv) the incurrence of Equipment Financing Guarantees; and
(xvi) the incurrence of Indebtedness arising from agreements of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course providing for indemnification, adjustment of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the disposition or acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with Subsidiary; provided that the maximum aggregate liability of such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of shall at no time exceed the gross proceeds actually received by the Company or and its Restricted Subsidiaries in connection with any Restricted Subsidiary issued in exchange for, such disposition or the net gross proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if actually paid by the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to and its Restricted Subsidiaries in connection with any such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) acquisition. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09, the Company Issuers shall, in its their sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09. Accrual of interest, accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation Fixed Charges of the Consolidated Fixed Charge Coverage Ratio of the CompanyCompany as accrued.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (National Crane Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, Stock and the Company’s Consolidated Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock if the Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which the additional Indebtedness is incurred or the Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided that the maximum principal amount of Indebtedness (including Acquired Debt), Disqualified Stock and preferred stock that may be incurred or issued, as applicable, pursuant to this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million at any time outstanding. The provisions of the first paragraph of this Section 4.09 will not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) Restricted Subsidiary of Indebtedness and reimbursement obligations under one or more letters of credit under the Credit Facilities in an (including any -52- guarantee of the Indebtedness by any Restricted Subsidiary); provided that the aggregate principal amount at any one time of all Indebtedness outstanding under all Credit Facilities under this clause (1i) after giving effect to the incurrence does not exceed an amount equal to exceed $400.0 million (with letters of credit being deemed to have a principal amount equal to the greater maximum face amount thereunder) plus (in the case of (x) $1,000.0 million and (yany refinancing) the sum aggregate amount of $650.0 million fees, underwriting discounts, premiums and 25.0% other costs and expenses incurred in connection with the refinancing, less the aggregate amount of Adjusted Consolidated all Net Tangible Assets;
(2) Indebtedness Proceeds of Asset Sales applied by the Company or any Guarantor Restricted Subsidiary to repay any term Indebtedness under Credit Facilities pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesSection 4.12;
(3ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of Indebtedness evidenced by the Initial Notes and related Guarantees;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage or construction financings or purchase money obligations or similar financings or refinancings thereof, in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of design, installation, construction, repair or improvement of property (real or personal), plant or equipment used in the business of the Company or any Restricted Subsidiary outstanding on (whether through the direct acquisition, construction, repair or improvement of such assets or the acquisition of Equity Interests of any Person acquiring, constructing, repairing, improving or otherwise owning such assets), in an aggregate principal amount (which amount may, but need not, be incurred in whole or in part after the Issue DateDate under the Credit Facilities) not to exceed the greater of: (a) $150.0 million or (b) 17.5% of Total Tangible Assets (measured at the time of incurrence of any such Indebtedness), and not otherwise referred to in this Section 4.07(b)either case outstanding at any time;
(4v) 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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that would have been permitted by this Indenture to be incurred under the first paragraph hereof or clauses (ii), (iii), (v) and (xiv) of this paragraph;
(vi) 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 (A) if the Company is the obligor on this Indebtedness, the Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, (B) if any Guarantor is the obligor on this Indebtedness to a Restricted Subsidiary that is not a Guarantor, the Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Guarantee of such Guarantor and (C) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such the Restricted Subsidiary, as the case may be, that was not permitted by this clause (4vi);
(5vii) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations (other than for speculative purposes);
(viii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by other clauses of this paragraph) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (viii), not to exceed the greater of (i) $150.0 million and (ii) 17.5% of Total Tangible Assets (measured at the time of incurrence of any such Indebtedness);
(ix) the guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary, which is Indebtedness was permitted to be incurred under by another provision of this IndentureSection 4.09; provided that in the case of a guarantee by any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.15;
(6x) Indebtedness of the Company or a Restricted Subsidiary owed to (including obligations in respect of letters of credit for the benefit of) any Person in connection with worker’s compensation, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person to the Company or the Restricted Subsidiary, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business and consistent with past practices;
(xi) the incurrence of Permitted Bonding Obligations;
(xii) the incurrence of Indebtedness arising from agreements of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreementsproviding for indemnification, but only to the extent such obligations do not, on a net basis, exceed 105% adjustment of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously Subsidiary; provided that with respect to any such acquisition or disposition, becomes a the maximum aggregate liability of this Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted SubsidiarySubsidiaries in connection with any such disposition;
(12xiii) Permitted Refinancing the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (xiii);
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by other clauses of this paragraph) to finance the repurchase of the Designated Vessels, which are utilized at the time of incurrence by the Company or a Restricted Subsidiary under operating leases, in each case on terms not materially less favorable on the whole than those set forth in the repurchase provisions contained in such operating leases as in effect as of the Issue Date;
(xv) the guarantee by the Company or a Restricted Subsidiary of Indebtedness of any entity which is not wholly owned by the Company or any of its Restricted Subsidiaries; provided that the maximum liability of the Company or any a Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, thereunder does not exceed $30.0 million at any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debttime; and
(14xvi) Indebtedness incurred as a result of the Company or accounting for an extension of the term of any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements lease existing on the Issue Date as a capital lease under GAAP as a result of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) extension. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09, the Company shall, in its sole discretion may, at any timediscretion, classify or(or later reclassify in whole or in part, from time to time, reclassify all or any portion of such in its sole discretion) that item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09. Accrual of interest, accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation Fixed Charges of the Consolidated Fixed Charge Coverage Ratio Company as accrued. Notwithstanding any other provision of this Section 4.09, the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence maximum amount of Indebtedness denominated that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in a foreign currency, the dollar-equivalent exchange rates or currency values. The principal amount of such any Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured supported by a letter of credit that serves issued under a Credit Facility in accordance with clause (i) above shall not be deemed a separate incurrence of Indebtedness for purposes of this Section 4.09, but only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal extent of the Indebtedness so secured by such letter stated amount of credit and (y) the amount that may be drawn under such letter of credit.
(h) . The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness in the case of any Indebtedness issued with original issue discount;
(2) the maximum fixed redemption liability with respect to any Disqualified Stock or preferred stock of a Restricted Subsidiary;
(3) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(4) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such asset at a price less than the date of determination, and
(b) the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectivelyin any such case, “incur”)) any Indebtedness, any Indebtedness (including any Acquired Debt and the issuance Issuer will not issue any shares of Disqualified Stock)Stock or permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, unless such however, that the Issuer may incur Indebtedness is incurred by the Company or any Guarantor and, issue shares of Disqualified Stock (in each case, including Acquired Indebtedness) and any Restricted Subsidiary may incur Indebtedness (in each case, including Acquired Indebtedness) or issue shares of Disqualified Stock or preferred stock, if immediately after and giving effect thereto, the Company’s Consolidated Fixed Charge Coverage Ratio for the Issuer’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such additional Indebtedness taken as one period is at least equal incurred or such Disqualified Stock or preferred stock is issued would have been not less than 2.0 to or greater than 2.25:1.
1.0, determined on a pro forma basis (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all including a pro forma application of the following (collectivelynet proceeds therefrom), as if the “Permitted Debt”):
(1) additional Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Datehad been incurred, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted SubsidiaryDisqualified Stock or preferred stock had been issued, as the case may be, that was not permitted by this clause (4);
(5) guarantees at the beginning of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiariesfour quarter period; provided that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or preferred stock if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the aggregate principal net proceeds therefrom) the amount incurred by the Company or any of Indebtedness of Restricted Subsidiary Subsidiaries that are not Guarantors that would be outstanding pursuant to this clause (7a) outstanding at any time shall not would exceed aggregate the greater of (xi) $25.0 30.0 million and (yii) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary Total Assets in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), the Issuer will not issue any Acquired Debt Disqualified Stock, and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Issuer will not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and permit any of its Restricted SubsidiariesSubsidiaries (other than a Guarantor) to issue any Disqualified Stock; provided, however, that (i) the Issuer and any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and may incur Indebtedness (iiincluding Acquired Debt) any sale or other transfer of any issue Disqualified Stock if, for the most recently ended Test Period immediately preceding the date on which such additional Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company incurred or such Restricted SubsidiaryDisqualified Stock is issued, the Fixed Charge Coverage Ratio would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, that was not permitted by this clause (4);at the beginning of such Test Period.
(5b) guarantees The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any Indebtedness of the Company following items of Indebtedness (collectively, “Permitted Debt”) or the issuance of any Disqualified Stock described below: (1) (i) the incurrence by the Issuer or any of its Restricted Subsidiaries which is permitted of Warehouse Indebtedness, (ii) the incurrence of any Indebtedness subject to be incurred under this Indenture;
the Alternative Financing Trigger and/or (6iii) Indebtedness of the Company incurrence by the Issuer or any of its Restricted Subsidiary that constitutes Subsidiaries of Indebtedness (aincluding guarantees and letters of credit) obligations pursuant under one or more Credit Facilities, provided that, after giving effect to Interest Rate Agreementsany such incurrence, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of all Indebtedness incurred under this sub-clause (iii) (with letters of credit being deemed to have a principal amount equal to the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness maximum potential liability of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale Issuer and leaseback transactionsits Subsidiaries thereunder) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) then outstanding at any one time shall does not exceed the greater of (xa) $25.0 million 125,000,000 and (yb) 1.515.0% of Adjusted the Issuer’s Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case Total Assets determined at the time of such incurrence; (2) the incurrence exceed by the Fair Market ValueIssuer and the Guarantors of Indebtedness represented by the Initial Notes, any PIK Notes issued as determined in accordance with PIK Payments on the definition of such term, Initial Notes and the related Note Guarantees; (3) the incurrence by the Issuer or its Restricted Subsidiaries of the acquired or constructed asset or improvement so financed;
(8) Existing Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such than Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b2) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.4.09(b);
Appears in 1 contract
Sources: Exchange Agreement (Better Home & Finance Holding Co)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company shall not and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or any Guarantor andissue Disqualified Stock, in each case, if the Company’s Consolidated Fixed Charge Coverage Leverage Ratio for at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the same had occurred at the end of the most recently-recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or available, would have been no greater than 2.25:13.25 to 1.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of (A) the Company incurrence by the Issuer or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Guarantor of Priority Lien Debt in an aggregate principal amount at any one time outstanding not to exceed the Priority Lien Cap and (B) the incurrence by the Issuer or any Guarantor of Junior Lien Debt in an aggregate principal amount at any time outstanding not to exceed the Junior Lien Cap;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer or any Guarantor of Parity Lien Debt (which may include without limitation Additional Notes issued under this Indenture following the consummation of the transactions described in the Offering Circular) in an aggregate amount incurred pursuant to this clause (13) (together with all Notes already issued and still outstanding at such time) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible AssetsParity Lien Cap;
(24) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, lease financings or purchase money obligations, in each case, incurred for the purpose of financing (whether or not incurred at the time of such purchase, design, construction, installation, integration or improvement) all or any part of the purchase price or cost of design, construction, installation, integration or improvement of property, plant or equipment used in the business of the Company or any Guarantor of its Restricted Subsidiaries, or ownership rights with respect to indefeasible rights of use or minimum investment units (or similar ownership units) in domestic or transnational fiber optic cable or other transmission facilities, and, in each case, including acquisitions by way of acquisitions of the Equity Interests of a Person that becomes a Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the Notes this clause (excluding 4), not to exceed $30.0 million at any Additional Notes) and any Guarantee of the Notestime outstanding;
(35) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to renew, and not otherwise referred refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under Section 4.09(a) hereof or clauses (2), (4), (5), (14), (15) or (16) of this Section 4.07(b4.09(b);
(46) 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 that:
(A) if the Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to prior payment in full in cash of all Obligations then due (and not merely outstanding under) with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (46);
(57) guarantees the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any Indebtedness such Disqualified Stock to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into Hedging Obligations in the ordinary course of business for or incurred to hedge any interest rate risk on any fixed or floating rate Indebtedness that was permitted to be incurred under the purpose first paragraph of mitigating against risks encountered in a this covenant or any clause under the definition of “Permitted BusinessDebt”;
(79) Indebtedness of (A) the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred Guarantee by the Company or any of its Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater Subsidiaries of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in of the ordinary course Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of business this covenant; provided that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed; and (bB) other letters the Guarantee by Restricted Subsidiaries that are not Guarantors of creditIndebtedness of Restricted Subsidiaries that are not Guarantors to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant;
(10) the incurrence by the Company or any of the Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, surety, bid, performance, appeal or similar bondsself-insurance obligations, bankers’ acceptances, accommodation guarantees for the benefit of trade creditors, completion guarantees or similar instruments; provided thatperformance guarantees, in each case contemplated by this clause (8), upon the drawing of such letters of credit credit, completion or performance bonds and surety, appeal or judgment bonds or other instrument, such similar obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising incurred in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the incurrence by the Company or any of the Restricted Subsidiary Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five (5) Business Days;
(12) Indebtedness arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreementproviding for indemnification, guarantees, earnouts, purchase price adjustments or similar obligations, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock a Subsidiary, other than guarantees of a Restricted Subsidiary Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Person that, contemporaneously with Subsidiary for the purpose of financing such acquisition or disposition, becomes a Restricted Subsidiaryacquisition;
(1213) Permitted Refinancing Indebtedness representing installment insurance premiums of the Company or any Restricted Subsidiary issued owing to insurance companies or insurance premium financings, in exchange foreach case, or in the net proceeds ordinary course of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)business;
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) (A) Indebtedness of any Persons existing at the Company time such Persons become Subsidiary Guarantors or Restricted Subsidiaries or are merged with or into or consolidated with the Issuer or any Guarantor or Restricted Subsidiary, or assumed in connection with an acquisition of property (including Equity Interests) by the Issuer or any Guarantor or Restricted Subsidiary and (B) other Indebtedness incurred in addition connection with an Asset Acquisition by the Issuer or any Guarantor or Restricted Subsidiary, provided that such Indebtedness was in existence prior to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements the contemplation of such IndebtednessPersons becoming Subsidiary Guarantors or Restricted Subsidiaries or such merger or consolidation or such acquisition of property or Asset Acquisition, so long as provided further that the ratio of the aggregate principal amount of all such Indebtedness outstanding incurred with respect to any such transaction to Consolidated EBITDA (for the most recent four-quarter period for which financial information is available) attributable to the Person or property so acquired pursuant to such transaction (as determined in good faith by the Company) is 2.5 to 1.0 or less, and does not exceed (together with all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14)) $20.0 million in the aggregate at any one time outstanding;
(15) (A) the incurrence by any Australian Subsidiary or any Canadian Subsidiary of Indebtedness in the an aggregate shall principal amount (or accreted value, as applicable) at any time outstanding not to exceed the greater of (x) $50.0 million 20.0 million; and (yB) 3.0% the incurrence by any Restricted Subsidiary of Adjusted Consolidated Net Tangible Assetsthe Company that is not a Domestic Subsidiary of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $10.0 million; and
(16) the incurrence by the Issuer or any Guarantor of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $40.0 million.
(c) The Company shall not incur, and shall not permit the Issuer or any other Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company, the Issuer or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the Note Guarantees on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured on junior priority basis or junior in right of distribution of collateral proceeds.
(d) For purposes of determining compliance with this Section 4.074.09 and Section 4.12 hereof, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt described in clauses (1) through (16) of Section 4.074.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted (in its sole discretion maydiscretion) to classify such item of Indebtedness on the date of its incurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this covenant. Notwithstanding the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior toforegoing, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall all Priority Lien Debt will be deemed to have been incurred pursuant to in reliance on the exception provided by clause (1) of paragraph the definition of Permitted Debt and all Parity Lien Debt outstanding on the date of this Indenture will be deemed to have been incurred in reliance on the exception provided by clause (b2) of this Section 4.07 rather than paragraph the definition of Permitted Debt (aprovided, however, that such Parity Lien Debt that is still outstanding shall reduce the amount of Parity Lien Debt that is available under clause (3) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one the definition of Permitted Debt). The accrual of interest or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interestpreferred stock or Disqualified Stock dividends, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any preferred stock or Disqualified Stock or Preferred Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof as accrued shall be of any such accrual, accretion or payment is included as required in the calculation Consolidated Interest Expense of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness incurred pursuant thereto was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that (x) the U.S. dollar-equivalent principal amount of Existing Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that of this Indenture, and (y) if such Indebtedness was is incurred to renew, refund, refinance, replace, defease or discharge other Indebtedness denominated in a foreign currency (or in a different currency from such Indebtedness so being incurred), and such renewal, refunding, refinancing, replacement, defeasance or discharge 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 renewal, refunding, refinancing, replacement, defeasance or discharge, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such new Indebtedness does not exceed (i) the outstanding or committed principal amount (whichever is higher) of such Indebtedness being renewed, refunded, refinanced, replaced, defeased, or discharged plus (ii) the aggregate amount of accrued interest and fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such renewal, refunding, refinancing, replacement, defeasance or discharge. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(ge) If The amount of any Indebtedness is outstanding as of any date will be:
(1) the accreted value of the Indebtedness (other than net Hedging Obligations), in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness (other than net Hedging Obligations), in the case of any other Indebtedness;
(3) in respect of net Hedging Obligations, the termination value of the related Hedge Agreement that would be payable by the applicable Person as of such date;
(4) in respect of Indebtedness of another Person secured by a letter Lien on the assets of credit that serves only to secure the specified Person, the lesser of:
(A) the Fair Market Value of such Indebtedness, then assets at the total date of determination; and
(B) the amount deemed incurred pursuant to of such Indebtedness and such letter of credit shall be the other Person; and
(5) in respect of Disqualified Stock, an amount equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit its voluntary or involuntary liquidation preference and (y) the amount that may be drawn under such letter of creditits maximum fixed repurchase price, but excluding accrued dividends, if any.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will notExcept as provided in clause (b) of this Section 6.01, and will not cause or neither the Borrower nor Holdings shall, nor shall either permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), and neither the Borrower nor Holdings shall issue any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, Clause (a) of this Section 6.01 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the Company incurrence by the Borrower or Holdings or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities of their respective Subsidiaries of unsecured Indebtedness in an aggregate principal amount at (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any one time outstanding under Indebtedness incurred pursuant to this clause (1i)) which does not to exceed at any time outstanding for the greater Borrower, Holdings and their respective Subsidiaries $10,000,000, in the aggregate; provided that such Indebtedness shall have (A) a final Stated Maturity of principal at least six months later than the Maturity Date (xor, in the case of a letter of credit, an expiry date at least six months later than the Maturity Date) $1,000.0 million and (yB) a Weighted Average Life to Maturity longer than the sum Weighted Average Life to Maturity of $650.0 million the Loans; provided, further that no draw under a letter of credit by the beneficiary thereof (and 25.0% resulting reimbursement obligation of Adjusted Consolidated Net Tangible Assetsthe Borrower or Holdings or any of their respective Subsidiaries in respect thereof) prior to such date shall be considered a violation of the requirement set forth in this clause (i) regarding the final Stated Maturity thereof;
(2ii) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes[Reserved];
(3iii) the Existing Indebtedness of (reduced by any principal repayment thereof, except for any such repayment to the Company or extent made with proceeds from any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(bPermitted Refinancing Indebtedness);
(4iv) the Second Lien Indebtedness and the Guarantee of the Second Lien Indebtedness;
(v) [Reserved];
(vi) the incurrence by any Loan Party of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness or the Existing 10% Notes) that was permitted to be incurred under subclause (i) or (iii) of this clause (b);
(vii) the incurrence by any Loan Party of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesLoan Parties; provided, however, that that:
(iA) if any Loan Party is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Borrower Obligations and Guarantor Obligations; and
(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof Loan Party and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofLoan Party, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause subclause (4vii);
(5viii) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture[Reserved];
(6ix) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.076.01;
(x) [Reserved];
(xi) [Reserved];
(xii) [Reserved];
(xiii) [Reserved];
(xiv) any Indebtedness incurred under the Loan Documents and the Guarantee of such Indebtedness;
(xv) [Reserved];
(xvi) [Reserved];
(xvii) [Reserved]; and
(xviii) [Reserved].
(c) Neither the Borrower nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor (as applicable) unless such Indebtedness is also contractually subordinated in right of payment to the Credit Agreement Obligations or the Guarantor Obligations (as applicable) on substantially identical terms; provided, in each such casehowever, that no Indebtedness of the amount thereof as accrued Borrower or any Guarantor shall be included as required deemed to be contractually subordinated in the calculation right of payment to any other Indebtedness of the Consolidated Fixed Charge Coverage Ratio Borrower or such Guarantor (as applicable) solely by virtue of the Company.
(f) being unsecured. For purposes of determining compliance with any dollar-denominated restriction on this Section 6.01, in the incurrence event that an item of Indebtedness denominated meets the criteria of more than one of the categories of Permitted Debt described in a foreign currencyclauses (i) through (xviii) of paragraph (b) above, the dollar-equivalent principal amount Borrower may, in its sole discretion, classify (and later reclassify) such item of Indebtedness in any manner that complies with this Section, and such item of Indebtedness incurred pursuant thereto shall will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed treated as having been incurred pursuant to only one of such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditclauses.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Credit Agreement (Xm Investment LLC)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will notExcept as provided in clause (b) of this Section 6.01, and will not cause or neither the Borrower nor Holdings shall, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), and neither the Borrower nor Holdings shall issue any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, Clause (a) of this Section 6.01 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the Company incurrence by the Borrower, Holdings or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities of their respective Subsidiaries of unsecured Indebtedness in an aggregate principal amount at (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any one time outstanding under Indebtedness incurred pursuant to this clause (1i)) which does not to exceed exceed, at any time outstanding for the greater Borrower, Holdings and their respective Subsidiaries, $11,000,000 in the aggregate; provided that such Indebtedness shall have (A) a final Stated Maturity of principal at least six months later than the Maturity Date (xor, in the case of a letter of credit, an expiry date at least six months later than the Maturity Date) $1,000.0 million and (yB) a Weighted Average Life to Maturity longer than the sum Weighted Average Life to Maturity of $650.0 million the Loans; provided, further, that no draw under a letter of credit by the beneficiary thereof (and 25.0% resulting reimbursement obligation of Adjusted Consolidated Net Tangible Assetsthe Borrower, Holdings or any of their respective Subsidiaries in respect thereof) prior to such date shall be considered a violation of the requirement set forth in this clause (i) regarding the final Stated Maturity thereof;
(2ii) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes[Reserved];
(3iii) the Existing Indebtedness of (reduced by any principal repayment thereof, except for any such repayment to the Company or extent made with proceeds from any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(bPermitted Refinancing Indebtedness);
(4iv) Indebtedness under the First Lien Credit Agreement and Guarantees of such Indebtedness;
(v) the incurrence by any Loan Party of any Permitted First Lien Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness under the First Lien Credit Agreement, so long the Borrower and Holdings take all actions required under Section 6.11(d) concurrently with the incurrence of such Permitted First Lien Refinancing Indebtedness;
(vi) the incurrence by any Loan Party of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness or the Existing 10% Notes) that was permitted to be incurred under subclause (i), (iii) or (iv) of this clause (b);
(vii) the incurrence by any Loan Party of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesLoan Parties; provided, however, that that:
(iA) if any Loan Party is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Borrower Obligations and Guarantor Obligations; and
(B) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof Loan Party and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofLoan Party, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause subclause (4vii);
(5viii) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.076.01; and
(ix) Indebtedness under the Loan Documents and Guarantees of such Indebtedness.
(c) Neither the Borrower nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Guarantor (as applicable) unless such Indebtedness is also contractually subordinated in right of payment to the Credit Agreement Obligations or the Guarantor Obligations (as applicable) on substantially identical terms; provided, in each such casehowever, that no Indebtedness of the amount thereof as accrued Borrower or any Guarantor shall be included as required deemed to be contractually subordinated in the calculation right of payment to any other Indebtedness of the Consolidated Fixed Charge Coverage Ratio Borrower or such Guarantor (as applicable) solely by virtue of the Company.
(f) being unsecured. For purposes of determining compliance with any dollar-denominated restriction on this Section 6.01, in the incurrence event that an item of Indebtedness denominated meets the criteria of more than one of the categories of Permitted Debt described in a foreign currencyclauses (i) through (ix) of paragraph (b) above, the dollar-equivalent principal amount Borrower may, in its sole discretion, classify (and later reclassify) such item of Indebtedness in any manner that complies with this Section, and such item of Indebtedness incurred pursuant thereto shall will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed treated as having been incurred pursuant to only one of such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditclauses.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Credit Agreement (Xm Investment LLC)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will and any Guarantor shall not, and will not cause directly or permit any of its Restricted Subsidiaries toindirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”)) any Indebtedness, any Indebtedness (including any Acquired Debt and the issuance of Company and any Guarantor shall not issue any Disqualified Stock); provided however, unless such Indebtedness is incurred by that, (I) the Company or and any Guarantor andmay incur Permitted Indebtedness or issue Permitted Disqualified Stock, in each case(II) prior to the consummation of a Qualified Public Company Event, the Company’s Consolidated Fixed Charge Coverage Ratio for Company and any Guarantor may incur Subordinated Indebtedness that (i) has a stated maturity date that is, and shall only be redeemed or repurchased, no earlier than the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding 91st day following the incurrence of such Indebtedness taken as one period is at least equal to or greater Maturity Date, and (ii) if secured by any Lien (other than 2.25:1.
a Permitted Lien (excluding clause (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1under such definition)) Indebtedness on any assets of the Company or any Guarantors Guarantor, such Lien shall rank junior in priority to Liens on such assets of the Company or Guarantor securing the Notes and (whether as borrowers or guarantorsIII) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed following the greater consummation of a Qualified Public Company Event, (x) $1,000.0 million and Indebtedness previously incurred pursuant to clause (II) of this proviso may rank pari passu in right of payment with the Notes, (y) the sum of $650.0 million Company and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes may incur additional Subordinated Indebtedness in accordance with clause (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue DateII), and not otherwise referred to in this Section 4.07(b);
(4z) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesGuarantor may incur Pari Passu Obligations; providedprovided further, howeverthat, that (i) any subsequent issuance or transfer of Capital Stock that results in if following a Qualified Public Company Event, any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
clause (6III)(z) Indebtedness is secured by any Lien (other than a Permitted Lien (excluding clause (b) under such definition)) on any assets of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07Guarantor, the Company and such Guarantor, as applicable, shall substantially contemporaneously create or permit such Lien to secure equally and ratably the Obligations in its sole discretion mayrespect of the Notes, at any time, classify or, from time to time, reclassify all or any portion of except that no such item of Indebtedness equal and only ratable Lien shall be required to include if the aggregate amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditdoes not exceed $2.5 million.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, and Astor Holdings II will not, directly or indirectly, create, incur, issue, incur, assume, guarantee Guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise with respect to (collectively, “"incur”), ") any Indebtedness (including as a result of an acquisition) and will not issue any Acquired Debt Disqualified Stock; PROVIDED that the Company and the Subsidiary Guarantors may incur Indebtedness or issue shares of Disqualified Stock if (i) no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such incurrence of Indebtedness or issuance of Disqualified Stock), unless such Indebtedness is incurred by Stock and (ii) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Astor Holdings II's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such additional Indebtedness taken as one period is incurred or such Disqualified Stock is issued would have been at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and 2.0 to 1 if such incurrence or issuance occurs on or before October 8, 1998 or (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company 2.25 to 1 if such incurrence or issuance occurs at any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemedtime thereafter, in each case, to constitute an incurrence case determined on a pro forma basis (including a pro forma application of such the net proceeds therefrom) as if the additional Indebtedness by had been incurred or the Company or such Restricted SubsidiaryDisqualified Stock had been issued, as the case may be, that was not permitted by this clause (4);at the beginning of such four-quarter period.
(51) guarantees $30.0 million (or its foreign currency equivalent), LESS the amount of any all Net Proceeds applied to permanently reduce the commitments under the Revolving Credit Facility and (2) the Borrowing Base; PROVIDED that a change in currency exchange rates which causes the amount of Indebtedness of the Company or any of and its Domestic Restricted Subsidiaries which is permitted outstanding to exceed the levels specified above shall not be incurred under this Indenture;
deemed an incurrence of Indebtedness; (6ii) Indebtedness of the incurrence by the Company or and any Restricted Subsidiary of Indebtedness that constitutes (a) obligations is fully secured by letters of credit permitted pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreementsclause (i)(B) above or clause (vi) below; (biii) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of incurrence by the Company or and any Restricted Subsidiary Guarantor of Indebtedness represented by Capital Lease Obligations the Notes and the Note Guarantees; (whether or not incurred pursuant to sale and leaseback transactionsiv) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred incurrence by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any defease or refund Existing Indebtedness, including Existing Disqualified Stock or other Indebtedness that was permitted by this Indenture to be incurred; (v) the incurrence (A) by any Disqualified Stock, incurred pursuant Wholly Owned Restricted Subsidiary of Indebtedness owing to paragraph (a) of this Section 4.07 and clauses (2)held by the Company, (3), (12B) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of by the Company or any Wholly Owned Restricted Subsidiary of Indebtedness owing to and held by any Wholly Owned Subsidiary or (C) by ABI Acquisition 2 plc of Indebtedness owing to and held by ABI Acquisition 1 plc, by ABI Acquisition 1 plc of Indebtedness owing to and held by Astor Holdings II or by Astor Holdings II of Indebtedness owing to and held by the Parent, in each case pursuant to the provisions of the ABI Shareholder Intercompany Notes; PROVIDED that such Indebtedness owed by the Company or any Wholly Owned Restricted Subsidiary that is a Guarantor to any Wholly Owned Restricted Subsidiary that is not a Guarantor is made expressly subordinate to the payment in full of all Obligations with respect to the Notes and the Note Guarantees; (vi) the incurrence by Restricted Subsidiaries, other than Domestic Restricted Subsidiaries, of Indebtedness incurred for working capital purposes and any Guarantee thereof by the Company or Astor Holdings II in an aggregate outstanding principal amount for all such Indebtedness permitted solely pursuant to this clause (vi), and together with the aggregate outstanding principal amount of Indebtedness permitted pursuant to clause (i)(B) above, does not exceed at any time the Working Capital Amount; and (vii) the incurrence by the Company, Astor Holdings II or any Restricted Subsidiary of Indebtedness (in addition to that described Indebtedness permitted by any other clause of this paragraph) in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the an aggregate principal amount of all such Indebtedness outstanding (or accreted value, as applicable) at any one time in the aggregate shall outstanding not to exceed the greater of $10 million (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) or its foreign currency equivalent). For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one covenant each of the types of Indebtedness permitted by this Section 4.07, following events (but not solely the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, following events) shall be deemed to have been incurred pursuant constitute an "incurrence" of Indebtedness upon the happening thereof: (i) any event that causes any Unrestricted Subsidiary to clause be a Restricted Subsidiary shall be deemed to be the incurrence of such former Unrestricted Subsidiary's Indebtedness by such Restricted Subsidiary and (1ii) any sale of paragraph (b) equity or other event that results in any Wholly Owned Restricted Subsidiary ceasing to be a Wholly Owned Restricted Subsidiary or a transfer of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting any such Indebtedness but may be permitted in part by one such provision and in part the Company to a Person that is not the Company, or by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interesta Wholly Owned Restricted Subsidiary to a Person that is not a Wholly Owned Restricted Subsidiary, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not shall be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each by such case, that former Wholly Owned Restricted Subsidiary or such Person upon the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount happening of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurredevent.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Astor Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Debt) or issue any Acquired Debt Disqualified Stock; provided, however, that the Company and the issuance of Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), unless such Indebtedness is incurred by Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all four-quarter period. The first paragraph of this Section 4.09 will not prohibit the following (collectively, the “"Permitted Debt”"):
(1a) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets275.0 million;
(2b) Existing Indebtedness;
(c) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(d) 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 construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount not to exceed $15.0 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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or clause (c) of this paragraph;
(f) the incurrence of Indebtedness of the Company or owed to a Guarantor and Indebtedness of any Guarantor pursuant owed to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiariesother Guarantor; provided, however, that that:
(i) such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Guarantor; and
(ii) (A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof Guarantor of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall Guarantor of the Company; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (4f);
(5g) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary Hedging Obligations that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case are incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all or hedging interest rate risk with respect to any part floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(h) the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Guarantors of Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course that was permitted to be incurred by another provision of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditSection 4.09;
(9i) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock, for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof is included in Consolidated Interest Expense of the Company as accrued shall be included as required accrued;
(j) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the calculation case of daylight overdrafts) drawn against insufficient funds in the Consolidated Fixed Charge Coverage Ratio ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(k) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (k), not to exceed $20.0 million;
(l) the issuance by the Company of up to 250,000 shares of its Series A Convertible Preferred Stock in connection with the Company.'s reorganization as described in the Offering Memorandum dated March 15, 2002 relating to the Offering, plus any dividends paid in kind on its Series A Convertible Preferred Stock; and
(fm) the incurrence by Restricted Subsidiaries that are not Guarantors of up to $5.0 million of Indebtedness in the aggregate outstanding at any one time. For purposes of determining compliance with any dollar-denominated restriction on this Section 4.09, in the incurrence event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (a) through (m) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify such item of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date of its incurrence in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such Indebtedness was incurred.
date in reliance on the exception provided by clause (ga) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter definition of credit and (y) the amount that may be drawn under such letter of creditPermitted Debt above.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Rotech Healthcare Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur“ incur ”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the ““ Permitted DebtDebt ”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; providedprovided , furtherfurther , that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; providedprovided , in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including any including, without limitation, Acquired Debt Indebtedness) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andand its Restricted Subsidiaries may incur Indebtedness, and the Company may issue Disqualified Stock, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1.0 at the time such additional Indebtedness is incurred or such Disqualified Stock is issued (such time being called the “Incurrence Time”), in each case as determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x1) $1,000.0 million 500,000,000 and (y2) the sum of $650.0 million and 25.020% of Adjusted the Company’s Consolidated Net Tangible AssetsAssets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available;
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, any Series B Notes issued in exchange for Series A Notes pursuant to an Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company is the obligor on such Indebtedness and the obligee is not a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes and (2) if a Guarantor is the obligor on such Indebtedness and the obligee is neither the Company nor a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all obligations of such Guarantor with respect to its Subsidiary Guarantee and (2)(i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and of the Company, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) thereof, including guarantees or obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations thereof with respect to letters of credit supporting such bid, performance or surety obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred other than for the purpose an obligation for money borrowed) or other forms of financing, refinancing, renewing, defeasing security or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted credit enhancement supporting performance obligations under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatservice contracts, in each case contemplated by this clause (8)case, upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10g) the guarantee by the Company of Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease any of its Restricted Subsidiaries or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreementSubsidiary, in each case case, that was permitted to be incurred or assumed in connection with the acquisition or disposition by another provision of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiarythis Section 4.09;
(12h) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clause (ab), (d) or (h) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13i) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired DebtPermitted Acquisition Indebtedness; and
(14j) other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) abovean aggregate principal amount that, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as when taken together with the aggregate principal amount of all such other Indebtedness outstanding at any one time in the aggregate shall incurred pursuant to this clause (j) and then outstanding, will not exceed the greater of (x1) $50.0 million 50,000,000 and (y2) 3.02.5% of Adjusted the Company’s Consolidated Net Tangible Assets.
Assets determined as of the end of the Company’s most recently completed fiscal quarter for which internal financial statements are available. The Company shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (cor by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or of 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 Subsidiary Guarantee of such Guarantor, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (i) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior tocomplies with this Section 4.09, and outstanding on (after giving effect to the application such item of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Indebtedness will be deemed to have treated as having been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07such category.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12.5:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million 50.0 million, which amount shall be permanently reduced by the amount of Net Available Cash from Asset Sales applied by the Company or any Restricted Subsidiary thereof to permanently repay any such Indebtedness, and not subsequently reinvested in Additional Assets, to the extent permitted pursuant to Section 4.11 hereof, and (y) the sum of $650.0 million and 25.015.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(a) if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, pursuant to an intercompany note in the form of Exhibit G hereto or pursuant to another agreement containing substantially the same subordination provisions as those contained in Section 2.01 of Exhibit G hereto; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a pledge or a similar action under a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by (x) the Company, (y) any Guarantor or (z) any Non-Guarantor Restricted Subsidiary (other than the Limited Partners) (if the Consolidated Net Worth of such Non-Guarantor Restricted Subsidiary, together with the Consolidated Net Worth of all other Non-Guarantor Restricted Subsidiaries (other than the Limited Partners), as of such date, does not exceed in the aggregate $5.0 million) of any Indebtedness of the Company or any of its Restricted Subsidiaries the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, ; and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating protecting, on a net basis, against price risks, basis risks, or other risks encountered in a Permitted the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the Company, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not to exceed the greater of (x) $25.0 10.0 million and (y) 1.52.5% of Adjusted Consolidated Net Tangible AssetsAssets outstanding at any time; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in accordance with the definition of such termgood faith, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company or any Guarantor to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant purusant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (133) of this Section 4.07(b)paragraph (b) of this definition of “Permitted Debt;” and
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (1312) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed $15.0 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred on or prior to, and outstanding on (after giving effect to is in existence immediately following the application issuance of proceeds of the Initial Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (1) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 above rather than paragraph (a) of this Section 4.07above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Brigham Exploration Co)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) under one or more Credit Facilities Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed at any time outstanding the greater of of: (x) $1,000.0 million 200,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness in accordance with Section 4.10 hereof and (y) an amount that does not cause the sum First Lien Leverage Ratio of $650.0 million and 25.0% the Company to exceed 2.75 to 1.00 determined on a pro forma basis (including the pro forma application of Adjusted Consolidated Net Tangible Assetsthe net proceeds therefrom);
(2b) First Lien Notes and other Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred Date after giving effect to in this Section 4.07(b)the Permitted Closing Steps;
(4c) Hedging Obligations;
(d) Indebtedness represented by the Original Notes, or the Subsidiary Guarantees with respect to the Original Notes, and any Additional Notes issued in respect to any of the foregoing (including as PIK Interest thereon) in accordance with the terms hereof;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed at any time shall not exceed the greater of (x) outstanding $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed25,000,000;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), defease, (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 2% of the Company’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding;
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding and any guarantee thereof;
(m) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2m)), (3)collectively, (12) and (13) of this Section 4.07(b)in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(13n) if Acquired Indebtedness of a Subsidiary of the Company acquired after the Issue Date or a person merged into or consolidated with any member the Company or a Restricted Subsidiary after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Company could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrenceacquisition or other transaction;
(o) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(p) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(q) other than Indebtedness incurred pursuant to clauses (a), Acquired Debt(b), (d), (o) or (p) of the second paragraph of this Section 4.09, Indebtedness incurred in connection with the Permitted Closing Steps;
(r) a Capital Lease Obligation in connection with a Galileo Transaction; and
(14s) any vessel charter being treated as a finance or capital lease under IFRS; The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Parent Guarantor will not, and will not cause or permit the Company or any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by the Company or a Restricted Subsidiary), unless such Indebtedness is incurred by the Parent Guarantor, the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the Companyreceipt and application of the proceeds therefrom, the Parent Guarantor’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Parent Guarantor, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (including any Exchange Notes but excluding any Additional NotesNotes and Exchange Notes issued in exchange therefor) and any Guarantee of the NotesExisting Senior Notes or the Notes (excluding Guarantees of Additional Notes and Exchange Notes issued in exchange therefor);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Parent Guarantor, the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Parent Guarantor, the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Parent Guarantor, the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Parent Guarantor, the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of any Indebtedness of the Parent Guarantor, the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this the Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsParent Guarantor, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by Parent Guarantor, the Company or any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstanding at any time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, Indebtedness of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of Parent Guarantor, the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of Parent Guarantor, the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Parent Guarantor, the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight Seven or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article ElevenTen;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses (2), (3), (1211) and this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Parent Guarantor, the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Parent Guarantor, the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Parent Guarantor, the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the CompanyParent Guarantor.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Parent Guarantor, the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount For purposes of the liability thereof shall Indenture, no Indebtedness will be determined deemed to be subordinate or junior in accordance with GAAPright of payment to other Indebtedness solely by virtue of not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the other Indebtedness.
Appears in 1 contract
Sources: Supplemental Indenture (Laredo Petroleum Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will ▇▇▇▇ Las Vegas shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), or (ii) issue any Acquired Debt and the issuance of Disqualified Stock). Notwithstanding the foregoing, unless such ▇▇▇▇ Las Vegas and its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio of ▇▇▇▇ Las Vegas for the ▇▇▇▇ Las Vegas’ most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be (the “Reference Period”) would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds from the Indebtedness, as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations), to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (xi) $1,000.0 million and 1.0 billion less (yii) the sum aggregate amount of $650.0 million all Net Proceeds of Assets Sales applied by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under the Credit Agreement or repay any revolving credit Indebtedness under the Credit Agreement and 25.0% effect a corresponding permanent reduction of Adjusted Consolidated Net Tangible Assetscommitments thereunder pursuant to Section 4.10 hereof or otherwise;
(2) Indebtedness the incurrence by the Issuers and the Restricted Subsidiaries of ▇▇▇▇ Las Vegas of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under this Section 4.07(b4.09(a), under clauses (2), (7), (8), (9), (12), (13), (14) or (15) of this Section 4.09(b), or under this clause (3);
(4) incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company ▇▇▇▇ Las Vegas and any of its Restricted Subsidiaries; provided, however, that:
(A) if ▇▇▇▇ Las Vegas or any Guarantor is the obligor on such Indebtedness and the payee is not ▇▇▇▇ Las Vegas or a Guarantor, such Indebtedness must be expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of ▇▇▇▇ Las Vegas, or its Note Guarantee under this Indenture, in the case of a Guarantor, except that no Indebtedness of ▇▇▇▇ Las Vegas or any Guarantor shall be deemed to be subordinated in right of payment to any other Indebtedness of ▇▇▇▇ Las Vegas or any such Guarantor solely by virtue of being unsecured; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company ▇▇▇▇ Las Vegas or a Restricted Subsidiary thereof thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither ▇▇▇▇ Las Vegas nor a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company ▇▇▇▇ Las Vegas or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business;
(6) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness solely in respect of performance, and (c) obligations pursuant to hedging arrangements (includingsurety, without limitationappeal or similar bonds or commercial or standby letters of credit, swaps, caps, floors, collars, options and similar agreements) entered into so long as such Indebtedness is incurred in the ordinary course of business for and the purpose aggregate amount of mitigating against risks encountered in a Permitted Businessall such bonds and standby letters of credit is not greater than $60.0 million at any time outstanding;
(7) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development equipment (including acquisitions of property Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the business Projects by ▇▇▇▇ Las Vegas or any of the Company or its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding ), not to exceed $100.0 million at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary under (a) one Subsidiaries of Indebtedness in a principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by discharge any Indebtedness incurred pursuant to this clause (8), upon not to exceed, at any time, 75% of the drawing aggregate cost of such letters the Phase III Project to pay the costs and expenses of credit or other instrumentdesigning, such obligations are reimbursed within 60 days following such drawing; provideddeveloping and constructing the Phase III Project, further, that with respect so long as the Holders continue to clauses (a) and (b), such Indebtedness is not have a perfected first priority security interest in connection with the borrowing of money or the obtaining of advances or creditGolf Course Land;
(9) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of the Company Equity Interests of Wynn Resorts or any Restricted Subsidiary with respect permitted pursuant to obligations relating to oil or gas balancing positions arising in the ordinary course clause (6) of businessSection 4.07(b) hereof;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven[intentionally omitted];
(11) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligationsSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant not to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryexceed $100.0 million;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)2017 Notes;
(13) if the Company could incur $1.00 7 7/8% 2020 Notes;
(14) the 7 3/4% 2020 Notes;
(15) the incurrence by the Issuers of the Notes issued on the date of this Indenture and the Note Guarantees;
(16) the incurrence of Indebtedness (and the Guarantee of such Indebtedness by ▇▇▇▇ Las Vegas) in an amount not to exceed 100% of the Fair Market Value of the Aircraft, which is secured only by ▇▇▇▇▇ permitted by clause (26) of the definition of “Permitted Liens;”
(17) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness pursuant (so long as such Indebtedness is incurred under the Credit Agreement, through the issuance of Additional Notes under this Indenture, is unsecured Indebtedness or is Permitted Junior Debt) to paragraph be used to develop and construct an Additional Entertainment Facility and/or a Retail Facility on land included in the Projects in an aggregate principal amount (aor original accreted value, as applicable) at any time not to exceed 66 2/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility; provided that, subsequent to the date of this Section 4.07 after giving effect Indenture and on or prior to the date of the incurrence of such incurrenceIndebtedness, Acquired Debtnet cash proceeds have been received by ▇▇▇▇ Las Vegas as a contribution to its common equity capital in an amount equal to at least 33 1/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility, which proceeds have been irrevocably committed at the time of such contribution for use in the development and construction of such Additional Entertainment Facility and/or a Retail Facility; and
(1418) the incurrence by ▇▇▇▇ Capital, as co-obligor, of any Indebtedness of which ▇▇▇▇ Las Vegas is permitted to incur pursuant to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsforegoing provisions.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in (1) through (17) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers shall be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application of proceeds of Notes), date on which the Issue Date, Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, authenticated under this Indenture shall initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (bSection 4.09(b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual hereof. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries may incur pursuant to this Section 4.07; provided4.09 shall not be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, any Indebtedness which is permitted to be incurred by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries under clause (7) set forth above may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount;
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate Indebtedness, in effect on the date that such Indebtedness was incurred.case of any other Indebtedness; and
(g3) If in respect of Indebtedness is of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xA) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hB) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Wynn Las Vegas LLC)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), other than Permitted Debt, and the issuance of Company shall not issue any Disqualified Stock), unless such Indebtedness is incurred by and shall not permit any of its Restricted Subsidiaries to issue any preferred stock or any Disqualified Stock; provided, however, that the Company or any Guarantor and, in each case, may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any Guarantor may issue preferred stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities in an Facilities; provided, however, that, immediately after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not to exceed the greater of (xa) $1,000.0 50.0 million and or (yb) the sum of $650.0 million and 25.015.0% of Adjusted Consolidated Net Tangible Total Assets;
(2) Indebtedness of the incurrence by the Company or any Guarantor and the Guarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees to be issued on the Issue Date and the related Exchange Notes and Subsidiary Guarantees to be issued pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesRegistration Rights Agreement;
(3) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness, the Issue Datenet proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), and not otherwise referred (3), (5), (6), (8), (12), (13) or (14) of this paragraph or incurred pursuant to in the first paragraph of this Section 4.07(b)4.09;
(4) 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 (iA) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Notes and the Subsidiary Guarantees, as the case may be, and (B) (1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not then permitted by this clause (4);
(5) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used in the Permitted Business of the Company or a Restricted Subsidiary of the Company 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 (5), not to exceed $10.0 million as of any date incurrence;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Existing Indebtedness;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries which is permitted to be providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred under this Indenture;
(6) Indebtedness in connection with the disposition or acquisition of any business or assets of the Company or any of its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsSubsidiaries, but only to the extent other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness or assets of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred Subsidiaries for the purpose purposes of financingfinancing such acquisition; provided, refinancinghowever, renewing, defeasing or refunding all or any part of that (A) such Indebtedness is not reflected on the purchase price or cost of acquisition, construction, improvement or development of property used in the business balance sheet of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the aggregate principal amount balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(9) the guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by any other provision of this Section 4.09;
(10) the issuance by a Restricted Subsidiary of the Company of Disqualified Stock or preferred stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such Disqualified Stock or preferred stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such Disqualified Stock or preferred stock to a Person other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of Disqualified Stock by such Subsidiary that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business and under (bA) other documentary letters of credit, suretyor surety bonds or insurance contracts, bidincluding in connection with insurance premium financing agreements, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, which are to be repaid in each case contemplated by this clause (8), upon full not more than one year after the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), date on which such Indebtedness is not in connection with originally incurred to finance the borrowing purchase of money or the obtaining of advances or credit;
(9) Indebtedness of goods by the Company or any a Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
Company, (11B) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or standby letters of credit, surety bonds or performance bonds securing any obligation insurance contracts issued for the purpose of supporting (1) workers’ compensation or similar liabilities of the Company or a any of its Restricted Subsidiary pursuant to such an agreementSubsidiaries or (2) performance, in each case incurred payment, deposit or assumed in connection with surety obligations of the acquisition Company or disposition any of any businessits Restricted Subsidiaries and (C) bid, assets advance payment and performance bonds and surety bonds or Capital Stock of a similar insurance contracts for the Company and its Restricted Subsidiary or a Person thatSubsidiaries, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryand refinancings thereof;
(12) Permitted Refinancing Indebtedness of the incurrence by the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds Guarantor of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Permitted Acquisition Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 incurrence by any Restricted Subsidiary of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), together with all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 after giving effect 13), not to such incurrence, Acquired Debtexceed $10.0 million at any one time outstanding; and
(14) the incurrence by the Company or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable), together with all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (14), not to exceed $15.0 million at any one time outstanding. Neither the Company nor any Guarantor will incur any Indebtedness (including Permitted Debt) that is contractually 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 contractually subordinated in right of payment to the Notes or the Subsidiary Guarantees, as the case may be, on substantially identical terms; provided, however, that no Indebtedness of any Restricted Subsidiary Person will be deemed to be contractually subordinated in addition right of payment to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements other Indebtedness of such Indebtedness, so long as the aggregate principal amount Person solely by virtue of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described above or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09, the Company will, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.09 and only such item of Indebtedness or a portion thereof may be required classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of the applicable clauses or pursuant to include the amount first paragraph hereof. Indebtedness under any Credit Facility, including the Company’s New Revolving Credit Facility, and any guarantees of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Date will be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Permitted Debt in Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09. Accrual of interest, the accretion or amortization of original issue discount accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If , in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is secured by incurred to refinance other Indebtedness denominated in a letter foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of credit that serves only such refinancing, such U.S. dollar-dominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being refinanced. Notwithstanding any other provision of credit shall be equal to this Section 4.09, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a price less than result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred in a different currency from the liability thereof Indebtedness being refinanced, shall be determined calculated based on the currency exchange rate applicable to the currencies in accordance with GAAPwhich such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee guaranty or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise with respect to (collectively, “"incur”)" and correlatively, an "incurrence" of) any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any, and shall not permit any of its Subsidiaries to issue any, shares of Disqualified Stock); PROVIDED, unless such Indebtedness is incurred by HOWEVER, that the Company may incur Indebtedness or any Guarantor and, in each case, issue shares of Disqualified Stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.00 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued on or before April 15, 1996 or at least 2.25 to 1 if such Indebtedness is incurred or such Disqualified Stock is issued after April 15, 1996, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and including the earnings of any business acquired by the Company with the proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoingfour-quarter period; PROVIDED, HOWEVER, that until April 15, 1996, the Company and, may incur Indebtedness that is PARI PASSU in right of payment with the Notes pursuant to the extent specifically set forth belowforegoing Fixed Charge Coverage Ratio test only if the net proceeds thereof are used for capital expenditures (including Capital Lease Obligations), the Restricted Subsidiaries may incur acquisitions of businesses and Permitted Investments. In addition, each and all of the following Indebtedness shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Notes are subordinated to Senior Indebtedness: (collectively, the “Permitted Debt”):
A) all Indebtedness that does not provide for all interest payments to be made in cash; (1B) all Indebtedness of the Company or to any of its Subsidiaries; (C) any Indebtedness of the Company and its Subsidiaries if at the time of incurrence thereof, Indebtedness of the Company and the Guarantors that is PARI PASSU in right of payment to the Notes and the Note Guarantees (whether as borrowers or guarantorsincluding, on a pro forma basis, the Indebtedness to be incurred) exceeds $100 million; and (D) all obligations under one or more the 1994 BPC Holding Corporation Extraordinary Bonus Award Plan. The foregoing limitations shall not apply to (a) revolving credit Indebtedness and letters of credit pursuant to the New Revolving Credit Facilities Facility in an aggregate principal amount not to exceed at any one time outstanding under this clause (1) not to exceed the greater of (xi) $1,000.0 28 million and in principal amount (y) with letters of credit being deemed to have a principal amount equal to the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness maximum potential liability of the Company thereunder), less the aggregate amount of all repayments after the Issuance Date that permanently reduce the commitment under the New Revolving Credit Facility, and (ii) the Borrowing Base; (b) the Existing Indebtedness; (c) the Notes or any Guarantor pursuant to Note Guarantee; (d) the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of incurrence by the Company or any Restricted Subsidiary outstanding on the Issue Dateof Refinancing Indebtedness; PROVIDED, and not otherwise referred to in this Section 4.07(b);
HOWEVER, that such Refinancing Indebtedness is a Permitted Refinancing; (4e) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesWholly Owned Subsidiaries that are Guarantors; provided, however, (f) Indebtedness from the Company to Holding PROVIDED that (i) any subsequent issuance or transfer of Capital Stock that results in any the advances evidenced by such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not are permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate AgreementsSection 4.07 hereof; (bg) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Hedging Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case that are incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all or hedging interest rate risk with respect to any part floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; and (h) the purchase price or cost of acquisition, construction, improvement or development of property used in the business of incurrence by the Company or its Subsidiaries; provided that the Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other clause of this paragraph) in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall outstanding not to exceed the greater sum of (x) $25.0 1 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in time. Notwithstanding anything to the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07contrary, the Company in and its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Subsidiaries shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such incur any additional Senior Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtednessunless it is secured.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Cpi Holding Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, createdirectly or indirectly, create incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if:
(i) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, "Permitted Indebtedness"): (a) the “Permitted Debt”):
Indebtedness evidenced by the Notes; (1b) Indebtedness of the incurrence by the Company or any Guarantors (whether of its Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so long as borrowers or guarantors) under one or more Credit Facilities in an the aggregate principal amount of all Indebtedness outstanding under all Credit Facilities does not, at any one time outstanding under this clause (1) not to time, exceed the greater of (1) $400.0 million (or, if there is any permanent reduction in the aggregate principal amount permitted to be borrowed under the Credit Agreement, such lesser aggregate principal amount) and (2) an amount equal to the sum of [(x) $1,000.0 25 million and plus (y) the sum of $650.0 million and 25.030% of Adjusted Consolidated Net Tangible Assets;
] determined after the incurrance of such Indebtedness (2including the application of the proceeds therefrom; (c) the guarantee by any Subsidiary Guarantor of any Indebtedness that is permitted by this Indenture to be incurred by the Company; (d) all Indebtedness of the Company or any Guarantor pursuant and its Restricted Subsidiaries in existence as of the date of the Indenture after giving effect to the Notes (excluding any Additional Notes) Cometra Acquisition, the related financing transactions and any Guarantee the application of the Notes;
proceeds thereof; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; providedPROVIDED, howeverHOWEVER, that (i) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinate to the payment in full of all Obligations with respect to the Notes and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause ; (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guarantees, performance bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9) Indebtedness of the Company other than advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of business;
business and on terms and conditions which are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit guarantee or performance bond itself), not to exceed in the aggregate at any given time 5.0% of Total Assets; (10g) Indebtedness under Interest Rate Hedging Agreements entered into for the purpose of limiting interest rate risks, provided that the obligations under such agreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant and that the aggregate notional principal amount of such agreements does not exceed 105% of the principal amount of the Indebtedness to which such agreements relate; (h) Indebtedness under Oil and Gas Hedging Contracts, provided that such contracts were entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries; (i) the incurrence by the Company of Indebtedness not otherwise permitted to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes be incurred pursuant to Article Eight this paragraph, provided that the aggregate principal amount (or Article Eleven;
(11accreted value, as applicable) of all Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary incurred pursuant to such an agreementthis clause (i), together with all Permitted Refinancing Debt incurred pursuant to clause (j) of this paragraph in each case respect of Indebtedness previously incurred or assumed in connection with the acquisition or disposition of pursuant to this clause (i), does not exceed $10.0 million at any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
one time outstanding; (12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued Debt incurred in exchange for, or the net proceeds of which are used to renewrefinance, extend, substituterenew, defeasereplace, defease or refund, refinance or replace, any Indebtedness, Indebtedness that was permitted by this Indenture to be incurred (including any Disqualified Stock, Indebtedness previously incurred pursuant to paragraph this clause (aj)); (k) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted Subsidiary in addition to the ordinary course of business in connection with the obtaining of goods or services; (l) Indebtedness consisting of obligations in respect of purchase price adjustments, guarantees or indemnities in connection with the acquisition or disposition of assets; and (m) production imbalances that described in clauses (1) through (13) abovedo not, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in outstanding, exceed 2% of the aggregate Total Assets of the Company. The Company shall not exceed the greater permit any of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07its Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07however, the Company in its sole discretion may, at if any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of ceases to be Non-Recourse Debt, such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, event shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be constitute an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of by the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Lomak Petroleum Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Indebtedness) and that the Company shall not, and shall not permit any Acquired Debt of its Subsidiaries to, issue any Disqualified Stock; provided, however, that the Company and the issuance Subsidiary Guarantors may incur Indebtedness (including Acquired Indebtedness) and the Company and the Subsidiary Guarantors may issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if (A) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and the acquisitions in connection therewith), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period, and (B) no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, issuance of such Disqualified Stock. The provisions of the Company and, first paragraph of this covenant shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “"Permitted Debt”"):
(1i) the incurrence by the Company and Subsidiary Guarantors of Indebtedness under the New Credit Facility and the issuance and creation of letters of credit and banker's acceptances thereunder and any related reimbursement obligation (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) in an aggregate amount not to exceed $100,000,000 outstanding at any one time under this subsection (i), less the lesser of $50,000,000 and the aggregate amount of all Net Proceeds of Asset Sales that have been applied since the date of 60 55 this Indenture to reduce permanently the commitments with respect to such Indebtedness pursuant to Section 4.08;
(ii) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented by the Notes and the incurrence by the Subsidiary Guarantors of the Subsidiary Guarantees in an aggregate principal amount not to exceed $175,000,000;
(iv) 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 refund, refinance or replace Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount such Restricted Subsidiary that was permitted by this Indenture to be incurred at any one the time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsit was incurred;
(2v) Indebtedness the incurrence by the Company, any of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company Subsidiary Guarantors or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) of intercompany Indebtedness between or among the Company and Company, any of its the Subsidiary Guarantors or any Restricted SubsidiariesSubsidiary; provided, however, that (i) if the Company or a Subsidiary Guarantor is the obligor on such Indebtedness, such Indebtedness is unsecured and subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and the Subsidiary Guarantees, as the case may be, and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Company, a Subsidiary Guarantor or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Company, a Subsidiary Guarantor or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Company, such Subsidiary Guarantor or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4v);
(5vi) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries which is of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that was permitted by the terms of this Indenture to be incurred under this Indentureat the time it was incurred; provided, that the notional principal amount of such Hedging Obligations at th e time such Hedging Obligations were incurred do not exceed the principal amount of Indebtedness to which such Hedging Obligations relate;
(6vii) the Guarantee by the Company or any of the Subsidiary Guarantors of Indebtedness of the Company or any a Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount Company that was 61 56 permitted to be incurred at the time it was incurred by another provision of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Businessthis covenant;
(7viii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute the incurrence of Indebtedness (and Liens, if any, securing such Indebtedness) by a Restricted Subsidiary of the Company; or
(ix) the incurrence by the Company or any Restricted of the Subsidiary Guarantors of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or its Subsidiaries; provided that the such Subsidiary, in an aggregate principal amount incurred not to exceed $20,000,000 at any time outstanding; or
(x) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur exceed $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) 10,000,000. For purposes of determining compliance with this Section 4.07covenant, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described above or is entitled to be incurred pursuant to the first paragraph of this Section 4.07covenant, the Company shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness in any manner that complies with this covenant and only be required to include the amount such item of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have treated as having been incurred pursuant to clause (1) only one of such clauses or pursuant to the first paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) hereof. Accrual of interest, the accretion or amortization of original issue discount accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Companycovenant.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Medaphis Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), other than Permitted Debt, and the issuance Company shall not issue, and shall not permit any of its Restricted Subsidiaries to issue, any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor and, in each case, Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding the foregoing, the Company and, The provisions of paragraph (a) of this Section 4.3 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities in an Facilities; provided, however, that, immediately after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not to exceed the greater of (xA) $1,000.0 400 million and or (yB) the sum of $650.0 million and 25.020% of Adjusted Consolidated Net Tangible AssetsAssets at the time of incurrence;
(2) Indebtedness of the incurrence by the Company or and the Guarantors of Indebtedness represented by (A) the Initial Securities and the Subsidiary Guarantees issued on the Issue Date and (B) any Guarantor Exchange Securities and Subsidiary Guarantees issued thereafter pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notesa Registration Rights Agreement;
(3) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Subsidiaries of Existing Indebtedness;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness, the net proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), (3), (4), (8) or (11) of this paragraph or incurred pursuant to the first paragraph of this Section 4.3;
(5) 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 (A) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Securities and the Subsidiary Guarantees, as the case may be, and (B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not then permitted by this clause (45);
(56) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used in the Permitted Business of the Company or a Restricted Subsidiary of the Company or incurred to extend, refinance, renew, replace, defease or refund any such purchase price or cost of construction, improvement or development, in an aggregate principal amount not to exceed $50 million at any time outstanding;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries which is permitted to be providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred under this Indenture;
(6) Indebtedness in connection with the disposition or acquisition of any business, assets or a Restricted Subsidiary of the Company or any business or assets of its Restricted Subsidiaries, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred Subsidiaries for the purpose purposes of financingfinancing such acquisition; provided, refinancinghowever, renewing, defeasing or refunding all or any part of that (A) such Indebtedness is not reflected on the purchase price or cost of acquisition, construction, improvement or development of property used in the business balance sheet of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the aggregate principal amount balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(9) the guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by any other provision of this Section 4.3; provided that the guarantee of any Indebtedness of a Restricted Subsidiary of the Company that ceases to be such a Restricted Subsidiary shall be deemed a Restricted Investment at the time such Restricted Subsidiary’s status terminates in an amount equal to the maximum principal amount so guaranteed, for so long as, and to the extent that, such guarantee remains outstanding;
(10) the issuance by a Restricted Subsidiary of the Company of Disqualified Stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such Disqualified Stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of Disqualified Stock by such Subsidiary that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business and under (bA) other documentary letters of credit, suretyor surety bonds or insurance contracts, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, which are to be repaid in each case contemplated by this clause (8), upon full not more than one year after the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), date on which such Indebtedness is not in connection with originally incurred to finance the borrowing purchase of money or the obtaining of advances or credit;
(9) Indebtedness of goods by the Company or any a Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
Company, (11B) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or standby letters of credit, surety bonds or performance bonds securing any obligation insurance contracts issued for the purpose of supporting (i) workers’ compensation or similar liabilities of the Company or any of its Restricted Subsidiaries or (ii) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries and (C) bid, advance payment and performance bonds and surety bonds or similar insurance contracts for the Company and its Restricted Subsidiaries, and refinancings thereof; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other provision of this covenant) in an aggregate principal amount (or accreted value, as applicable) not to exceed the greater of (A) $25 million at any one time outstanding or (B) 2.5% of Consolidated Net Tangible Assets as of any date of incurrence after giving pro forma effect to such incurrence and the application of proceeds therefrom.
(c) To the extent the Company’s Unrestricted Subsidiaries incur Non-Recourse Indebtedness and any such Indebtedness ceases to be Non-Recourse Indebtedness of such Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary pursuant of the Company that was subject to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;this covenant.
(12d) Neither the Company nor any Guarantor will incur any Indebtedness (including Permitted Refinancing Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary issued such Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in exchange for, right of payment to the Securities or the net proceeds of which are used to renewSubsidiary Guarantees, extendas the case may be, substituteon substantially identical terms; provided, defeasehowever, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) that no Indebtedness of the Company or any Restricted Subsidiary Person will be deemed to be contractually subordinated in addition right of payment to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements other Indebtedness of such Indebtedness, so long as the aggregate principal amount Person solely by virtue of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsbeing unsecured.
(ce) For purposes of determining compliance with this Section 4.074.3, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt set forth in Section 4.074.3(b) or is entitled to be incurred pursuant to Section 4.3(a), the Company will, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.3 and only such item of Indebtedness or a portion thereof may be required to include the amount of such Indebtedness classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of such types (the applicable clauses of Section 4.3(b) or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.3(a). Accrual of interest, the accretion or amortization of original issue discount accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.3.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If , in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is secured by incurred to refinance other Indebtedness denominated in a letter foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of credit that serves only such refinancing, such U.S. dollar-dominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being refinanced. Notwithstanding any other provision of credit shall be equal to this covenant, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company may incur pursuant to this covenant shall not be deemed to be exceeded solely as a price less than result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred in a different currency from the liability thereof Indebtedness being refinanced, shall be determined calculated based on the currency exchange rate applicable to the currencies in accordance with GAAPwhich such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: Indenture (Key Energy Services Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) 26 The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise with respect to (collectively, “"incur”), ") any Indebtedness (including any Acquired Debt Debt) and the issuance Company and the Restricted Subsidiaries shall not issue any Disqualified Stock; provided, however, that the Company and the Restricted Subsidiaries may incur Indebtedness or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period, would have been at least (i) 1.25 to 1 for an incurrence or issuance occurring on or before _______, 1998 [fourth full fiscal quarter], or (ii) 1.50 to 1 for an incurrence or issuance occurring after _____________, 1998 and on or before _______, 1998 [sixth full fiscal quarter], or (iii) 1.75 to 1 for an incurrence or issuance occurring after _____________, 1998 and on or before _______, 1999 [eighth full fiscal quarter], or (iv) 2.0 to 1 for an incurrence or issuance occurring at any time thereafter or, solely in the case of an incurrence of Indebtedness or an issuance of Disqualified Stock on or before _______, 1999 [eighth full fiscal quarter], the Fixed Charge Coverage Ratio for the Company's most recently ended full fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness taken is incurred or such Disqualified Stock is issued, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as one period is if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such quarter, would have been at least equal 2.0 to or greater than 2.25:1.
(b) Notwithstanding 1. The provisions of the foregoing, the Company and, first paragraph of this covenant shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness: (collectively, i) the “Permitted Debt”):
incurrence by the Company of Indebtedness under revolving credit facilities and the issuance and creation of letters of credit and banker's acceptances thereunder (1with letters of credit and banker's acceptances being deemed to have a principal amount equal to the face amount thereof) up to an aggregate amount equal to the greater of (y) $50.0 million or (z) the Borrowing Base; (ii) the incurrence by the Company of Indebtedness represented by the Notes and the Subsidiary Guarantees; (iii) Indebtedness of (including Capital Lease Obligations) incurred by the Company or any Guarantors of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether as borrowers through the direct purchase of assets or guarantorsthe Capital Stock of any Person owning such assets) under one or more Credit Facilities in an aggregate principal amount at any one time which, when aggregated with the principal amount of all other Indebtedness then outstanding under and incurred pursuant to this clause (1) together with any Refinancing Indebtedness with respect thereto), does not to exceed the greater of $10.0 million; (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2iv) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims or self-insurance, or similar reimbursement obligations regarding workers' compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence; (v) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case incurred or assumed in connection with the disposition of any Guarantor pursuant to business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the Notes purpose of financing such acquisition; provided, however, that (excluding any Additional NotesA) and any Guarantee of such Indebtedness is not reflected on the Notes;
(3) Indebtedness balance sheet of the Company or any Restricted Subsidiary outstanding on the Issue Date, (contingent obligations referred to in a footnote to financial statements and not otherwise referred reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, including non-cash proceeds (the fair market value of which shall be measured at the time received and without giving effect 27 to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition; (vi) 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 refund, refinance or replace, Indebtedness that was permitted by this Section 4.07(b);
Indenture to be incurred; (4vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that (iA) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (B)(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (bviii) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into Hedging Obligations that are incurred in the ordinary course of business (A) for the purpose of mitigating against risks encountered in a Permitted Business;
fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (7B) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all or hedging currently exchange rate risk with respect to any part of currency exchanges; (ix) the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Subsidiary Guarantors of Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or that was permitted to be incurred by another provision of this covenant; (x) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any Restricted Subsidiary with respect such Indebtedness ceases to obligations relating be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to oil or gas balancing positions arising in the ordinary course constitute an incurrence of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or by a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) Company; and (13xi) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant in an aggregate amount outstanding not to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding exceed $_____ at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) time. For purposes of determining compliance with this Section 4.07covenant, in the event that an item of Indebtedness meets the criteria of more than one of the types categories described in clauses (i) through (x) above or is entitled to be incurred pursuant to the first paragraph of Indebtedness permitted by this Section 4.07covenant, the Company shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness in any manner that complies with this covenant and only such item of Indebtedness will be required to include the amount of such Indebtedness treated as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have having been incurred pursuant to clause (1) only one of such clauses or pursuant to the first paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) hereof. Accrual of interest, accretion or amortization interest of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accreted value will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Companycovenant.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Except as provided in clause (b) of this Section 6.01 the Borrower shall not, and will shall not cause or permit any of its Restricted Material Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance of Borrower shall not issue any Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, Clause (a) of this Section 6.01 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1i) Indebtedness of the Company incurrence by the Borrower or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Material Subsidiary of unsecured Indebtedness in an aggregate principal amount at (including the aggregate principal amount of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any one time outstanding under Indebtedness incurred pursuant to this clause (1i)) which does not exceed, as of the date of such incurrence, at any time outstanding $500,000,000; provided that such Indebtedness shall have a final Stated Maturity of principal at least six months later than the Maturity Date;
(ii) unsecured subordinated Indebtedness or Disqualified Stock of the Borrower in an aggregate principal amount (or liquidation preference, as applicable) (including the aggregate principal amount (or liquidation preference, as applicable) of all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness or Disqualified Stock, as applicable, incurred pursuant to this subclause (iii)) at any time outstanding not to exceed the greater product of (a) $100.00 and (b) the number of Subscribers at such time; provided that such subordinated Indebtedness or Disqualified Stock, as applicable, shall have a Weighted Average Life to Maturity longer than the Weighted Average Life to Maturity of the Loans and a final Stated Maturity of principal at least six months later than the Maturity Date;
(iii) the incurrence by the Borrower and its Material Subsidiaries of (x) $1,000.0 million the Existing Indebtedness, including pursuant to the January 2003 Financing Transactions (other than the borrowings described in clause (c) of the definition thereof) and (y) Indebtedness under the sum of GM/OnStar Credit Facility in an aggregate principal amount not to exceed $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets150,000,000;
(2iv) the incurrence by the Borrower and any Subsidiary Loan Party of Indebtedness of represented by the Company or New Senior Notes and any Guarantor Guarantees thereof and any exchange notes and Guarantees thereof to be issued pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesRegistration Rights Agreement;
(3v) the incurrence by the Borrower or any Material Subsidiary 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 Company purchase price or cost of acquisition, construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary, or of Indebtedness in connection with a sale and leaseback transaction permitted by Section 6.05(b), in an aggregate principal amount (and/or amount of Attributable Debt, as applicable), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this subclause (v), not to exceed $100,000,000 at any time outstanding;
(vi) the incurrence by the Borrower or any Restricted Subsidiary outstanding on Loan Party, or Material Subsidiary as applicable, of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace, Indebtedness (other than intercompany Indebtedness or the Secured Notes) that was permitted to in be incurred under subclauses (i), (ii), (iii), (iv), (v), (x), (xi), (xii) or (xiii) of this Section 4.07(bclause (b);
(4vii) the incurrence by the Borrower or any Material Subsidiary of intercompany Indebtedness between or among the Company Borrower and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(iA) if the Borrower or any Material Subsidiary is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Borrower Obligations and Guarantor Obligations; and
(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Borrower or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Borrower or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or such Restricted Material Subsidiary, as the case may be, that was not permitted by this clause subclause (4vii);
(5viii) guarantees of any Indebtedness of the Company incurrence by the Borrower or any Material Subsidiary of its Restricted Subsidiaries which is permitted to be Hedging Obligations incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10ix) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.076.01;
(x) Indebtedness the proceeds of which are utilized solely to finance working capital in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this subclause (x), not to exceed the lesser of (A) $50,000,000 and (B) 80% of Qualified Receivables;
(xi) from and after any Parent Company Merger, Indebtedness of Holdings in existence on the Closing Date;
(xii) any Qualified Sale and Leaseback Transaction, including an XM-4 Sale and Leaseback Transaction;
(xiii) Satellite Vendor Indebtedness; and
(xiv) any Indebtedness incurred hereunder and the Guarantee of such Indebtedness.
(c) The Borrower shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Credit Agreement Obligations on substantially identical terms; provided, in each such casehowever, that no Indebtedness of the amount thereof as accrued Borrower shall be included as required deemed to be contractually subordinated in the calculation right of payment to any other Indebtedness of the Consolidated Fixed Charge Coverage Ratio Borrower solely by virtue of the Company.
(f) being unsecured. For purposes of determining compliance with any dollar-denominated restriction on this Section 6.01, in the incurrence event that an item of Indebtedness denominated meets the criteria of more than one of the categories of Permitted Debt described in a foreign currencyclauses (i) through (xiv) above, the dollar-equivalent principal amount Borrower may, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section, and such item of Indebtedness incurred pursuant thereto shall will be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed treated as having been incurred pursuant to only one of such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of creditclauses.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), other than Permitted Debt, and the issuance Company shall not issue, and shall not permit any of its Restricted Subsidiaries to issue, any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor and, in each case, Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding the foregoing, the Company and, The provisions of paragraph (a) of this Section 4.03 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities in an Facilities; provided, however, that, immediately after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not to exceed the greater of (xA) $1,000.0 500 million and (yB) the sum of $650.0 million and 25.035% of Adjusted Consolidated Net Tangible AssetsAssets at the time of incurrence;
(2) Indebtedness of the incurrence by the Company or any Guarantor pursuant to and the Notes (excluding any Additional Notes) Guarantors of Indebtedness represented by the Initial Securities and any Guarantee of the NotesSubsidiary Guarantees issued on the Issue Date;
(3) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Subsidiaries of Existing Indebtedness;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness, the net proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), (3), (4), (8) or (11) of this paragraph or incurred pursuant to the first paragraph of this Section 4.03;
(5) 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 (A) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Securities and the Subsidiary Guarantees, as the case may be, and (B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not then permitted by this clause (45);
(56) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used in the Permitted Business of the Company or a Restricted Subsidiary of the Company or incurred to extend, refinance, renew, replace, defease or refund any such purchase price or cost of construction, improvement or development, in an aggregate principal amount not to exceed $50 million at any time outstanding;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries which is permitted to be providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred under this Indenture;
(6) Indebtedness in connection with the disposition or acquisition of any business, assets or a Restricted Subsidiary of the Company or any business or assets of its Restricted Subsidiaries, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred Subsidiaries for the purpose purposes of financingfinancing such acquisition; provided, refinancinghowever, renewing, defeasing or refunding all or any part of that (A) such Indebtedness is not reflected on the purchase price or cost of acquisition, construction, improvement or development of property used in the business balance sheet of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the aggregate principal amount balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(9) the guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by any other provision of this Section 4.03; provided that the guarantee of any Indebtedness of a Restricted Subsidiary of the Company that ceases to be such a Restricted Subsidiary shall be deemed a Restricted Investment at the time such Restricted Subsidiary’s status terminates in an amount equal to the maximum principal amount so guaranteed, for so long as, and to the extent that, such guarantee remains outstanding;
(10) the issuance by a Restricted Subsidiary of the Company of Disqualified Stock to the Company or to any of its Restricted Subsidiaries; provided, however, that any subsequent event or issuance or transfer of any Equity Interests that results in the owner of such Disqualified Stock ceasing to be the Company or any of its Restricted Subsidiaries or any subsequent transfer of such preferred stock to a Person, other than the Company or one of its Restricted Subsidiaries, shall be deemed to be an issuance of Disqualified Stock by such Subsidiary that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness incurred in the ordinary course of business and under (bA) other documentary letters of credit, suretyor surety bonds or insurance contracts, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, which are to be repaid in each case contemplated by this clause (8), upon full not more than one year after the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), date on which such Indebtedness is not in connection with originally incurred to finance the borrowing purchase of money or the obtaining of advances or credit;
(9) Indebtedness of goods by the Company or any a Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
Company, (11B) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or standby letters of credit, surety bonds or performance bonds securing any obligation insurance contracts issued for the purpose of supporting (i) workers’ compensation or similar liabilities of the Company or any of its Restricted Subsidiaries or (ii) performance, payment, deposit or surety obligations of the Company or any of its Restricted Subsidiaries and (C) bid, advance payment and performance bonds and surety bonds or similar insurance contracts for the Company and its Restricted Subsidiaries, and refinancings thereof; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other provision of this covenant) in an aggregate principal amount (or accreted value, as applicable) not to exceed the greater of (A) $50 million at any one time outstanding and (B) 3.5% of Consolidated Tangible Assets as of any date of incurrence after giving pro forma effect to such incurrence and the application of proceeds therefrom.
(c) To the extent the Company’s Unrestricted Subsidiaries incur Non-Recourse Indebtedness and any such Indebtedness ceases to be Non-Recourse Indebtedness of such Unrestricted Subsidiary, then such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary pursuant of the Company that was subject to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;this covenant.
(12d) Neither the Company nor any Guarantor will incur any Indebtedness (including Permitted Refinancing Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary issued such Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in exchange for, right of payment to the Securities or the net proceeds of which are used to renewSubsidiary Guarantees, extendas the case may be, substituteon substantially identical terms; provided, defeasehowever, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) that no Indebtedness of the Company or any Restricted Subsidiary Person will be deemed to be contractually subordinated in addition right of payment to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements other Indebtedness of such Indebtedness, so long as the aggregate principal amount Person solely by virtue of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsbeing unsecured.
(ce) For purposes of determining compliance with this Section 4.074.03, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the types categories of Indebtedness permitted by this Permitted Debt set forth in Section 4.074.03(b) or is entitled to be incurred pursuant to Section 4.03(a), the Company will, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner that complies with this Section 4.03 and only such item of Indebtedness or a portion thereof may be required to include the amount of such Indebtedness classified (or later classified or reclassified) in whole or in part as having been incurred under more than one of such types (the applicable clauses of Section 4.03(b) or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.03(a). Accrual of interest, the accretion or amortization of original issue discount accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.03.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If , in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is secured by incurred to refinance other Indebtedness denominated in a letter foreign currency, and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of credit that serves only such refinancing, such U.S. dollar-dominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being refinanced. Notwithstanding any other provision of credit shall be equal to this covenant, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company may incur pursuant to this covenant shall not be deemed to be exceeded solely as a price less than result of fluctuations in the exchange rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred in a different currency from the liability thereof Indebtedness being refinanced, shall be determined calculated based on the currency exchange rate applicable to the currencies in accordance with GAAPwhich such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: First Supplemental Indenture (Key Energy Services Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. Holdings (aA) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise (collectively, “"incur”"), with respect to any Indebtedness (including Acquired Debt) and (B) shall not issue any Acquired Debt Disqualified Stock and the issuance shall not permit any of its Subsidiaries to issue any shares of Disqualified Stock); provided, unless such however, that the Issuers may incur Indebtedness is incurred by (including Acquired Debt) or issue shares of Disqualified Stock and Holdings' Subsidiaries may incur Indebtedness or issue preferred equity if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Holdings' most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 1.75 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “"Permitted Debt”"):
(1i) the incurrence by the Issuers and their Restricted Subsidiaries of Indebtedness under the New Credit Facility; provided that the aggregate principal amount of all term Indebtedness outstanding under the New Credit Facility after giving effect to such incurrence does not exceed an amount equal to $200.0 million plus (in the case of any refinancing thereof) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing less the aggregate amount of all scheduled or mandatory repayments of the Company principal of any term Indebtedness under the New Credit Facility (other than repayments that are immediately reborrowed) that have been made since the date hereof;
(ii) the incurrence by an Issuer and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities; provided that the aggregate principal amount of all revolving credit Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum face amount thereunder) outstanding under all Credit Facilities after giving effect to such incurrence does not exceed an amount equal to the greater of (A) the amount of the Borrowing Base and (B) $125.0 million less, in the case of clause (B), the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce revolving credit commitments under a Credit Facility pursuant to Section 4.10 hereof;
(iii) the incurrence by Holdings and its Restricted Subsidiaries of the Existing Indebtedness;
(iv) the incurrence by (A) the Issuers of Indebtedness represented by the Debentures sold in the Offering and (B) the incurrence by Grove and Grove Capital of Indebtedness represented by the Senior Subordinated Notes and the incurrence by the Subsidiary Guarantors (as defined in the Senior Subordinated Note Indenture) of Indebtedness represented by the guarantees of such Senior Subordinated Notes;
(v) the incurrence by Holdings or any Guarantors (whether as borrowers of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or guarantors) under one purchase money obligations or more Credit Facilities similar financings, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Holdings or such Restricted Subsidiary, in an aggregate principal amount not to exceed $10.0 million at any time outstanding;
(vi) the incurrence by Holdings or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Subsidiary prior to such acquisition by Holdings or one time of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by Holdings or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding under Indebtedness incurred pursuant to this clause (1vi) and any Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (vi), does not exceed $10.0 million;
(vii) the incurrence by Holdings or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to exceed refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the greater of first paragraph hereof or clauses (iii), (iv), (v), (vi) or (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsthis paragraph;
(2viii) Indebtedness of the Company incurrence by Holdings or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness its Restricted Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company Holdings and any of its Restricted Wholly Owned Subsidiaries, including a pledge of assets in connection therewith; provided, however, that (i) if one of the Issuers is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Debentures and (ii)(A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Holdings or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Holdings or a Wholly Owned Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4viii);
(5ix) guarantees of any Indebtedness of the Company incurrence by Holdings or any of its Restricted Subsidiaries which of Hedging Obligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be incurred under this Indenture;
outstanding, (6ii) Indebtedness the value of the Company foreign currencies purchased or received by Holdings or any of its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Subsidiaries in the ordinary course of business, and business as conducted by Holdings or any of its Restricted Subsidiaries (ciii) obligations pursuant commodity risk relating to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) commodity agreements to the extent entered into in the ordinary course of business for to protect Holdings and its Restricted Subsidiaries from fluctuations in the purpose prices of mitigating against risks encountered raw materials used in a Permitted Businessits business;
(7x) Indebtedness of the Company incurrence by Holdings or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Subsidiaries of additional Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7x), not to exceed $40.0 million;
(xi) outstanding at the incurrence by Holdings' Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any time such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Holdings that was not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under by this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedxi);
(8) xii) the Guarantee by the Issuers or any of their Restricted Subsidiaries of Indebtedness of Holdings or a Subsidiary of Holdings, which Indebtedness was permitted to be incurred by another provision of this Section 4.09;
(xiii) the Company or any Restricted Subsidiary under incurrence of Indebtedness (a) one or more standby including letters of credit issued credit) in respect of workers' compensation claims, self insurance obligations, performance, surety, bid or similar bonds and completion guarantees provided by or for the account of the Company Holdings or a Restricted Subsidiary in the ordinary course of business and consistent with past practices;
(bxiv) other letters the incurrence of creditIndebtedness, suretyincluding Guarantees, bid, performance, appeal by Holdings or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing any of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not its Restricted Subsidiaries in connection with the borrowing of money or the obtaining of advances or credita Dealer Financing Program;
(9xv) the incurrence of Equipment Financing Guarantees; and
(xvi) the incurrence of Indebtedness arising from agreements of the Company Holdings or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course providing for indemnification, adjustment of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the disposition or acquisition or disposition of any business, assets or Capital Stock of a Subsidiary; provided that the maximum aggregate liability of such Indebtedness shall at no time exceed the gross proceeds actually received by Holdings and its Restricted Subsidiary or a Person that, contemporaneously Subsidiaries in connection with any such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, disposition or the net gross proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, actually paid by Holdings and its Restricted Subsidiaries in connection with any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) acquisition. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by Permitted Debt described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.074.09, the Company Issuers shall, in its their sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09. Accrual of interest, accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof is included in Fixed Charges of Holdings as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Companyaccrued.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), " or an "incurrence") any Indebtedness (including including, without limitation, Acquired Indebtedness) and that the Company will not issue any Acquired Debt Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and its Restricted Subsidiaries may incur Indebtedness, and the issuance of Company may issue Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more the Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x1) $1,000.0 million 50,000,000 and (y2) the sum of $650.0 million and 25.025% of the Adjusted Consolidated Net Tangible Assets;
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, any Series B Notes issued in exchange for Series A Notes pursuant to an Exchange Offer or the Subsidiary Guarantees;
(e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, provided that (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Wholly Owned Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance, completion or surety bonds or guarantees issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant thereof with respect to sale and leaseback transactions) or Purchase Money Obligations letters of credit or other Indebtedness incurred obligation supporting such bid, performance, completion or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property surety obligations (in each case incurred other than for an obligation for money borrowed);
(g) the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any another Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided thatSubsidiary, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, furthercase, that with respect was permitted to clauses (a) and (b), such Indebtedness is not in connection with the borrowing be incurred by another provision of money or the obtaining of advances or creditthis Section 4.09;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12h) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clause (ab), (d) or (h) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13i) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph under a Revolving Credit Facility;
(aj) of this Section 4.07 after giving effect to such incurrence, Acquired Non-Recourse Debt; and
(14k) any additional Indebtedness in an aggregate principal amount not in excess of $15,000,000 at any one time outstanding. The Company shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such Indebtedness) is subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (k) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior tocomplies with this Section 4.09, and outstanding on (after giving effect to the application such item of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall Indebtedness will be deemed to have treated as having been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07such category.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Ascent Energy Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (including any Exchange Notes but excluding any Additional NotesNotes and Exchanges Notes issued in exchange therefor) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(B) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses (2), (3), (1211) and this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.this
Appears in 1 contract
Sources: Indenture (Laredo Petroleum, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will ▇▇▇▇ Las Vegas shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, (i) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), or (ii) issue any Acquired Debt and the issuance of Disqualified Stock). Notwithstanding the foregoing, unless such ▇▇▇▇ Las Vegas and its Restricted Subsidiaries may incur Indebtedness is incurred by (including Acquired Debt) or issue Disqualified Stock, if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio of ▇▇▇▇ Las Vegas for the ▇▇▇▇ Las Vegas’ most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, as the case may be (the “Reference Period”) would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds from the Indebtedness, as if the additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1four-quarter period.
(b) Notwithstanding The provisions of Section 4.09(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any Guarantors (whether as borrowers or guarantors) of its Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under (with letters of credit being deemed to have a principal amount equal to the sum of the face amount thereof and related unpaid reimbursement obligations), to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (xi) $1,000.0 million and 1.0 billion less (yii) the sum aggregate amount of $650.0 million all Net Proceeds of Assets Sales applied by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under the Credit Agreement or repay any revolving credit Indebtedness under the Credit Agreement and 25.0% effect a corresponding permanent reduction of Adjusted Consolidated Net Tangible Assetscommitments thereunder pursuant to Section 4.10 hereof or otherwise;
(2) Indebtedness the incurrence by the Issuers and the Restricted Subsidiaries of ▇▇▇▇ Las Vegas of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to refund, and not otherwise referred refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under this Section 4.07(b4.09(a), under clauses (2), (7), (8), (9) or (12) of this Section 4.09(b), or under this clause (3);
(4) incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company ▇▇▇▇ Las Vegas and any of its Restricted Subsidiaries; provided, however, that:
(a) if ▇▇▇▇ Las Vegas or any Guarantor is the obligor on such Indebtedness and the payee is not ▇▇▇▇ Las Vegas or a Guarantor, such Indebtedness must be expressly subordinated in right of payment to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of ▇▇▇▇ Las Vegas, or its Note Guarantee under this Indenture, in the case of a Guarantor, except that no Indebtedness of ▇▇▇▇ Las Vegas or any Guarantor shall be deemed to be subordinated in right of payment to any other Indebtedness of ▇▇▇▇ Las Vegas or any such Guarantor solely by virtue of being unsecured; and
(b) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company ▇▇▇▇ Las Vegas or a Restricted Subsidiary thereof thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or neither ▇▇▇▇ Las Vegas nor a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company ▇▇▇▇ Las Vegas or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business;
(6) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness solely in respect of performance, and (c) obligations pursuant to hedging arrangements (includingsurety, without limitationappeal or similar bonds or commercial or standby letters of credit, swaps, caps, floors, collars, options and similar agreements) entered into so long as such Indebtedness is incurred in the ordinary course of business for and the purpose aggregate amount of mitigating against risks encountered in a Permitted Businessall such bonds and standby letters of credit is not greater than $40.0 million at any time outstanding;
(7) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary Subsidiaries of Indebtedness represented by Capital Lease Obligations (whether Obligations, mortgage financings or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisitionpurchase money obligations, construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitiondesign, construction, installation or improvement of property, plant or development equipment (including acquisitions of property Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the business Projects by ▇▇▇▇ Las Vegas or any of the Company or its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding ), not to exceed $100.0 million at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary under (a) one Subsidiaries of Indebtedness in a principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by discharge any Indebtedness incurred pursuant to this clause (8), upon not to exceed, at any time, 75% of the drawing aggregate cost of such letters the Phase III Project to pay the costs and expenses of credit or other instrumentdesigning, such obligations are reimbursed within 60 days following such drawing; provideddeveloping and constructing the Phase III Project, further, that with respect to clauses so long as:
(a) and the Holders of the Notes continue to have a perfected first priority security interest in the Golf Course Land; and
(b), ) ▇▇▇▇ Las Vegas’ and its Restricted Subsidiaries’ total Indebtedness does not exceed 6.5 times Consolidated EBITDA for the four full fiscal quarters immediately preceding the date of such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditincurrence;
(9) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement for value of the Company Equity Interests of Wynn Resorts or any Restricted Subsidiary with respect permitted pursuant to obligations relating clause (6) of Section 4.07(b) hereof;
(10) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries on or prior to oil the Phase II Final Completion Date of Indebtedness represented by performance bonds, guaranties, trade letters of credit, bankers’ acceptances or gas balancing positions arising similar instruments issued by Person other than Wynn Resorts or any of its Restricted Subsidiaries for the benefit of a trade creditor of any such Person, in an aggregate amount not to exceed $20.0 million at any time outstanding so long as:
(a) such Indebtedness is incurred in the ordinary course of business;; and
(10b) Indebtedness the obligations of ▇▇▇▇ Las Vegas or the applicable Restricted Subsidiary, as the case may be, supported by such performance bonds, guaranties, trade letters of credit, bankers’ acceptances or similar instruments (A) consist solely of payment obligations with respect to costs incurred in accordance with the Phase II Project Budget, as applicable, which would otherwise be permitted to be paid by the applicable entity pursuant to the Disbursement Agreement and (2) if secured, are secured solely by Liens permitted by clause (22) of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Elevendefinition of “Permitted Liens;” and
(11) Indebtedness of the Company incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligationsSubsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant not to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiaryexceed $40.0 million;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)2014 Notes;
(13) if the Company could incur $1.00 incurrence of Indebtedness (and the Guarantee of such Indebtedness by ▇▇▇▇ Las Vegas) in an amount not to exceed 100% of the Fair Market Value of the Aircraft, which is secured only by Liens permitted by clause (26) of the definition of “Permitted Liens;”
(14) the incurrence by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries of additional Indebtedness pursuant (so long as such Indebtedness is incurred under the Credit Agreement, through the issuance of Additional Notes under this Indenture, is unsecured Indebtedness or is Permitted Junior Debt) to paragraph be used to develop and construct an Additional Entertainment Facility and/or a Retail Facility on land included in the Projects in an aggregate principal amount (aor original accreted value, as applicable) at any time not to exceed 662/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility; provided that, subsequent to the date of this Section 4.07 after giving effect Indenture and on or prior to the date of the incurrence of such incurrenceIndebtedness, Acquired Debtnet cash proceeds have been received by ▇▇▇▇ Las Vegas as a contribution to its common equity capital in an amount equal to at least 331/3% of the aggregate cost of such Additional Entertainment Facility and/or Retail Facility, which proceeds have been irrevocably committed at the time of such contribution for use in the development and construction of such Additional Entertainment Facility and/or a Retail Facility; and
(1415) the incurrence by ▇▇▇▇ Capital, as co-obligor, of any Indebtedness of which ▇▇▇▇ Las Vegas is permitted to incur pursuant to the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsforegoing provisions.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in (1) through (14) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers shall be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application of proceeds of Notes), date on which the Issue Date, Notes are first issued and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, authenticated under this Indenture shall initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph (bSection 4.09(b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual hereof. The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries may incur pursuant to this Section 4.07; provided4.09 shall not be exceeded solely as a result of fluctuations in exchange rates or currency values. In addition, any Indebtedness which is permitted to be incurred by ▇▇▇▇ Las Vegas or any of its Restricted Subsidiaries under clause (7) set forth above may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Indenture. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Company.any Indebtedness issued with original issue discount;
(f2) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate Indebtedness, in effect on the date that such Indebtedness was incurred.case of any other Indebtedness; and
(g3) If in respect of Indebtedness is of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xa) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hb) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Wynn Las Vegas LLC)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries toSubsidiaries, directly or indirectly, to create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “"incur”)" and, correlatively, "incurred" and "incurrence") any Indebtedness (including including, without limitation, Acquired Debt) or issue any Acquired Debt Disqualified Stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness or issue Disqualified Stock if, at the time of and immediately after giving pro forma effect to such incurrence of Indebtedness or such issuance of Disqualified Stock)Stock and the application of the proceeds therefrom, unless such the ratio of Consolidated Indebtedness is incurred to Consolidated Capitalization does not exceed 3 to 5.
(b) The foregoing limitation in Section 4.08(a) shall not apply to (with each exception to be given independent effect):
(i) the incurrence in the ordinary course of business by the Company and/or any of its Restricted Subsidiaries of Indebtedness evidenced by letters of credit;
(ii) the incurrence by the Company and/or any of its Restricted Subsidiaries of Vendor Indebtedness;
(iii) the incurrence by the Company and/or any of its Restricted Subsidiaries of the Existing Indebtedness and all borrowings after the Issue Date under the Existing Indebtedness;
(iv) the incurrence by the Company and/or any of its Restricted Subsidiaries of Indebtedness in an aggregate amount not to exceed $10.0 million at any one time outstanding;
(v) the incurrence by the Company and/or any of its Restricted Subsidiaries of Indebtedness in connection with customs' duties and the guarantees thereof;
(vi) Permitted Refinancings;
(vii) the incurrence by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the its Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);and
(5viii) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary Hedging Obligations that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case are incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all hedging interest rate or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that foreign currency risk with respect to clauses (a) and (b), such any floating rate Indebtedness that is not in connection with permitted by the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness terms of the Company or any Restricted Subsidiary with respect Indenture to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) be outstanding. For purposes of determining compliance with this Section 4.074.08, in the event that an item of Indebtedness Stock meets the criteria of more than one of the types of Indebtedness permitted by this categories described in clauses (i) through (viii) above or is entitled to be incurred pursuant to Section 4.074.08(a), the Company shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness in any manner that complies with this Section and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, item shall be deemed to have treated as having been incurred pursuant to clause (1) only one of paragraph (b) of this such clauses or pursuant to Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.08(a). Accrual of interestinterest or dividends, the accretion of accreted value or amortization of original issue discount liquidation preference and the payment of interest on any Indebtedness or dividends in the form of additional Indebtedness with the same termsIndebtedness, and the accretion or payment of dividends on any Disqualified Common Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the CompanySection.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Concord Camera Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt Indebtedness and the issuance of Disqualified Stock), unless such Indebtedness is incurred by the Company or any Subsidiary Guarantor or constitutes Acquired Indebtedness of a Restricted Subsidiary and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are publicly available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:12.00:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted DebtIndebtedness”):
(1) Indebtedness of the Company (and guarantees by Finance Corp. or any of the Subsidiary Guarantors (whether as borrowers or guarantorsof such Indebtedness) under one or more in respect of the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $300 million under any term loans made pursuant thereto, any notes or under any revolving credit facility or in respect of letters of credit thereunder, minus all permanent reductions of such Indebtedness arising out of principal payments made in respect of any term loans from the greater proceeds of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsan Asset Sale;
(2a) Indebtedness of the Company or any Guarantor Co-Obligors pursuant to the Notes (excluding any Additional Notes) and any Exchange Notes issued in exchange for the Notes (excluding any Additional Notes) pursuant to the Registration Rights Agreement and (b) any Guarantee of the Notes or the Exchange Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, date of this Indenture and not otherwise referred to in this Section 4.07(b)definition of “Permitted Indebtedness;”
(4) intercompany Indebtedness between or among of the Company and owing to a Restricted Subsidiary;
(A) provided that any Indebtedness of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or owing to a Restricted Subsidiary thereof that is not a Subsidiary Guarantor is made pursuant to an intercompany note and is unsecured and is subordinated in right of payment from and after such time as the Notes shall become due and payable (iiwhether at Stated Maturity, acceleration or otherwise) to the payment and performance of the Company’s obligations under the Notes;
(B) provided, further, that any sale disposition, pledge or other transfer of any such Indebtedness to a Person that is not either the Company (other than (1) a disposition, pledge or transfer to a Restricted Subsidiary thereof, or (2) a pledge permitted by Section 4.12 hereof) shall be deemed, in each case, deemed to constitute be an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was other obligor not permitted by this clause (4);
(5) guarantees Indebtedness of a Wholly Owned Restricted Subsidiary owing to the Company or another Wholly Owned Restricted Subsidiary;
(A) provided that any such Indebtedness is made pursuant to an intercompany note;
(B) provided, further, that (a) any disposition, pledge or transfer of any such Indebtedness to a Person (other than (1) a disposition, pledge or transfer to the Company or a Wholly Owned Restricted Subsidiary or (2) a pledge permitted by Section 4.12 hereof) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted by this clause (5), and (b) any transaction pursuant to which any Wholly Owned Restricted Subsidiary, which has Indebtedness owing to the Company or any other Wholly Owned Restricted Subsidiary, ceases to be a Wholly Owned Restricted Subsidiary shall be deemed to be the incurrence of its Indebtedness by such Wholly Owned Restricted Subsidiary that is not permitted by this clause (5);
(6) guarantees by any Subsidiary Guarantor of Indebtedness of either of the Co-Obligors or any Restricted Subsidiary of the Company which is permitted to be incurred under this Indenture, and guarantees by Foreign Subsidiaries of the Company of Indebtedness of Foreign Subsidiaries of the Company which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a7) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business and not for speculative purposes
(A) by the purpose Company or any Subsidiary Guarantor, pursuant to Interest Rate Agreements designed to protect the Company or any Subsidiary Guarantor against fluctuations in interest rates in respect of mitigating against risks encountered Indebtedness of the Company or any Subsidiary Guarantor as long as such obligations do not exceed the aggregate principal amount of such Indebtedness then outstanding, or
(B) by the Company, any Subsidiary Guarantor or any Restricted Subsidiary, under any Currency Hedging Agreements relating to (1) Indebtedness of the Company, any Subsidiary Guarantor or any Restricted Subsidiary and/or (2) obligations to purchase or sell assets or properties, in each case, incurred in the ordinary course of business of the Company, any Subsidiary Guarantor or any Restricted Subsidiary; provided, however, that such Currency Hedging Agreements do not increase the Indebtedness or other obligations of the Company, any Subsidiary Guarantor or any Restricted Subsidiary outstanding other than as a Permitted Businessresult of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(7) 8) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale Sale and leaseback transactionsLeaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the Company, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) 8) not to exceed $10 million outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assetstime; provided further that the principal amount of any Indebtedness permitted under this clause (7) 8) did not in each case at the time of incurrence exceed the Fair Market Valuefair market value, as determined by the Company in accordance with the definition of such termgood faith, of the acquired or constructed asset or improvement so financed;
(8) 9) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business consistent with past practice, (b) the $1 million letter of credit to be issued to First Data Corporation pursuant to the terms of the Sponsorship Indemnification Agreement, dated as of March 10, 2004, by and between the Company and First Data Corporation, as it may be amended from time to time, and (bc) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instrumentsinstruments pursuant to self-insurance and workers’ compensation obligations; provided that, in each case contemplated by this clause (8)9), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (a) and ), (b), and (c) such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(910) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil arising from the honoring by a bank or gas balancing positions arising 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; provided however, that such Indebtedness is extinguished within five Business Days of incurrence;
(1011) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight as described in Section 8.02 or Article Eleven8.03 hereof;
(1112) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary Subsidiary; provided that the maximum assumable liability in respect of all such obligations shall at no time exceed the gross proceeds actually paid or a Person that, contemporaneously with such acquisition or disposition, becomes a received by the Company and any Restricted Subsidiary, including the Fair Market Value of non-cash proceeds;
(1213) Permitted Refinancing Indebtedness of any guarantees including, without limitation, bid bonds or performance bonds, by the Company or any Restricted Subsidiary issued Guarantor in exchange forthe ordinary course of business for the benefit of customers, suppliers and other business partners, in each case other than Affiliates, in the aggregate amount outstanding at any one time of $5 million;
(14) any renewals, extensions, substitutions, refundings, refinancings or the net proceeds replacements (collectively, a “refinancing”) of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph (a) of this Section 4.07 4.09 and clauses (2), (3), (12) and (1317) of this Section 4.07(b)paragraph (b) of this definition of “Permitted Indebtedness,” including any successive refinancings so long as the borrower under such refinancing is the Company or a Subsidiary Guarantor or, if not the Company or a Subsidiary Guarantor, the same as the borrower of the Indebtedness being refinanced and the aggregate principal amount of Indebtedness represented thereby (or if such Indebtedness provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness plus any accreted value attributable thereto since the original issuance of such Indebtedness) is not increased by such refinancing plus the lesser of (a) the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced or (b) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Company incurred in connection with such refinancing and (1) in the case of any refinancing of Indebtedness that is Subordinated Indebtedness, such new Indebtedness is made subordinated to the Notes at least to the same extent as the Indebtedness being refinanced and (2) in the case of Pari Passu Indebtedness or Subordinated Indebtedness, as the case may be, such refinancing does not reduce the Average Life to Stated Maturity or the Stated Maturity of such Indebtedness;
(1315) if Indebtedness arising solely out of the conversion of “vault cash” (supplied pursuant to the Vault Cash Agreement for normal operating requirements at the automated teller machines of the Company could incur $1.00 or any of additional its Restricted Subsidiaries covered by the Vault Cash Agreement (the “ATMs”)) into Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to the Company or any of its Restricted Subsidiaries in accordance with the terms of the Vault Cash Agreement, so long as the proceeds of such incurrence, Acquired Debt; andIndebtedness are used solely in ATMs and for no other purpose;
(1416) Indebtedness of the Company or any of its Restricted Subsidiary Subsidiaries in addition to that described in clauses (1) through (1315) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness shall not exceed $15 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.aggregate; and
(c17) Indebtedness of one or more Foreign Subsidiaries, to the extent that the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.5:1. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07covenant, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Credit Facility Agreement (or amounts committed thereunder) which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (1) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 above rather than paragraph (a) of this Section 4.07.
(d) above. Indebtedness permitted by this Section 4.07 covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 covenant permitting such Indebtedness.
(e) . Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Capital Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Capital Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07covenant; provided, in each such case, that the amount thereof as accrued shall be is included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) . For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) . If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) . The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Central Credit, LLC)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectivelyin any such case, “incur”)) any Indebtedness, any Indebtedness (including any Acquired Debt and the issuance Issuer will not issue any shares of Disqualified Stock)Stock or permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, unless such however, that the Issuer may incur Indebtedness is incurred by the Company or any Guarantor and, issue shares of Disqualified Stock (in each case, including Acquired Indebtedness) and any Restricted Subsidiary may incur Indebtedness (in each case, including Acquired Indebtedness) or issue shares of Disqualified Stock or preferred stock, if immediately after and giving effect thereto, the Company’s Consolidated Fixed Charge Coverage Ratio for the Issuer’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such additional Indebtedness taken as one period is at least equal incurred or such Disqualified Stock or preferred stock is issued would have been not less than 2.0 to or greater than 2.25:1.
1.0, determined on a pro forma basis (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all including a pro forma application of the following (collectivelynet proceeds therefrom), as if the “Permitted Debt”):
(1) additional Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Datehad been incurred, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted SubsidiaryDisqualified Stock or preferred stock had been issued, as the case may be, that was not permitted by this clause (4);
(5) guarantees at the beginning of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiariesfour quarter period; provided that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or preferred stock if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the aggregate principal net proceeds therefrom) the amount incurred by the Company or any of Indebtedness of Restricted Subsidiary Subsidiaries that are not Guarantors that would be outstanding pursuant to this clause (7a) outstanding at any time shall not would exceed in aggregate the greater of (xi) $25.0 45.0 million and (yii) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Total Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) Indebtedness under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million €500,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness under Credit Facilities in accordance with Section 4.10 hereof and (y) the sum of $650.0 million and 25.010% of Adjusted the Company’s Consolidated Net Tangible Total Assets;
(2b) Existing Indebtedness;
(c) Hedging Obligations;
(d) Indebtedness of represented by the Company or Original Notes, any Guarantor Exchange Notes issued in exchange for Original Notes pursuant to a Registered Exchange Offer or the Subsidiary Guarantees with respect to the Original Notes (excluding any Additional Notes) and any Guarantee of the such Exchange Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed €50,000,000 at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedoutstanding;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, defease or refund Indebtedness incurred pursuant to the first paragraph and clauses (ab), (d) and (j) of the second paragraph of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13k) if Indebtedness of Restricted Subsidiaries of the Company could incur $1.00 (other than Guarantors) in an aggregate principal amount not to exceed 5% of additional the Company’s Consolidated Total Assets minus the sum of all Indebtedness pursuant to paragraph of Restricted Subsidiaries of the Company (aother than Guarantors) of this Section 4.07 after giving effect to such incurrence, Acquired Debtthen outstanding; and
(14l) any additional Indebtedness of the Company or any Restricted Subsidiary Guarantor in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the an aggregate principal amount not in excess of all such Indebtedness outstanding €50,000,000 at any one time outstanding and any guarantee thereof. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or of 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 Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (CGG Holding B.V.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including or issue any Acquired Debt Disqualified Stock and the issuance Company shall not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock), unless such Indebtedness is incurred by Stock to any Person other than the Company or any Guarantor and, in each case, a Wholly-Owned Restricted Subsidiary of the Company’s Consolidated ; PROVIDED, HOWEVER, that the Company and any Subsidiary Guarantor may incur Indebtedness or issue shares of Disqualified Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.5 to 1, determined on a pro forma basis as set forth in the definition of Fixed Charge Coverage Ratio; and
(ii) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Stock is issued or would occur as a consequence of the incurrence of such the additional Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) the issuance of the Disqualified Stock. Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all this Indenture shall not prohibit any of the following (collectively, "Permitted Indebtedness"): (a) the “Permitted Debt”):
Indebtedness evidenced by the Securities; (1b) Indebtedness of the incurrence by the Company or any Guarantors (whether of its Restricted Subsidiaries of Indebtedness pursuant to Credit Facilities, so long as borrowers or guarantors) under one or more Credit Facilities in an the aggregate principal amount of all Indebtedness outstanding under all Credit Facilities does not, at any one time outstanding under this clause (1) not to time, exceed the greater of (xi) $1,000.0 175 million and (yii) the sum Borrowing Base, provided that the Company may incur more than $175 million of $650.0 million and 25.0% Indebtedness pursuant to Credit Facilities only if the Fixed Charge Coverage Ratio for the Company's most recently ended four full fiscal quarters for which internal financial statements are available would have been at least 2.0 to 1, determined on a pro forma basis as set forth in the definition of Adjusted Consolidated Net Tangible Assets;
Fixed Charge Coverage Ratio; (2c) the guarantee by any Subsidiary Guarantor of any Indebtedness that is permitted by this Indenture to be incurred by the Company; (d) all Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee its Restricted Subsidiaries in existence as of the Notes;
date of this Indenture; (3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; providedPROVIDED, howeverHOWEVER, that if the Company is the obligor on such Indebtedness, (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause ; (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guarantees, performance bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9) Indebtedness of the Company other than advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of business;
business and on terms and conditions which are customary in the Oil and Gas Business, and other than the extension of credit represented by such letter of credit, guarantee or performance bond itself), not to exceed in the aggregate at any given time 5.0% of Total Assets; (10g) Indebtedness under Interest Rate Hedging Agreements entered into for the purpose of limiting interest rate risks, PROVIDED that the obligations under such agreements are related to payment obligations on Indebtedness otherwise permitted by the terms of this covenant and that the aggregate notional principal amount of such agreements does not exceed 105% of the principal amount of the Indebtedness to which such agreements relate; (h) Indebtedness under Oil and Gas Hedging Contracts, PROVIDED that such contracts were entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and its Restricted Subsidiaries; (i) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness not otherwise permitted to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes be incurred pursuant to Article Eight or Article Eleven;
(11) this paragraph, PROVIDED that the aggregate principal amount of all Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary incurred pursuant to such an agreementthis clause (i), together with all Permitted Refinancing Debt incurred pursuant to clause (j) of this paragraph in each case respect of Indebtedness previously incurred or assumed in connection with the acquisition or disposition of pursuant to this clause (i), does not exceed $20.0 million at any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
one time outstanding; (12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued Debt incurred in exchange for, or the net proceeds of which are used to renewrefinance, extend, substituterenew, defeasereplace, defease or refund, refinance or replace, any Indebtedness, Indebtedness that was permitted by this Indenture to be incurred (including any Disqualified Stock, Indebtedness previously incurred pursuant to paragraph this clause (a) of this Section 4.07 and j), but excluding Indebtedness under clauses (2b), (3e), (12f), (g), (h), (k), (l) and (13m)); (k) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness accounts payable or other obligations of the Company or any Restricted Subsidiary to trade creditors created or assumed by the Company or such Restricted Subsidiary in addition to the ordinary course of business in connection with the obtaining of goods or services; (l) Indebtedness consisting of obligations in respect of purchase price adjustments, guarantees or indemnities in connection with the acquisition or disposition of assets; (m) production imbalances occurring in the ordinary course of business that described in clauses (1) through (13) abovedo not, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time outstanding, exceed 2% of the Total Assets of the Company; (n) rents and royalties due others incurred in the aggregate ordinary course of the Oil and Gas Business; and (o) Indebtedness of a Subsidiary Guarantor in respect of the Subsidiary Guarantee of such Subsidiary Guarantor. The Company shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07permit any Unrestricted Subsidiary to incur any Indebtedness other than Non-Recourse Debt; provided, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07however, the Company in its sole discretion may, at if any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of ceases to be Non-Recourse Debt, such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, event shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be constitute an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of by the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, ““ incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the ““ Permitted Debt”):
(1i) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (xA) $1,000.0 million 200.0 million, which amount shall be permanently reduced by the amount of Net Available Cash from Asset Sales applied by the Company or any Restricted Subsidiary thereof to permanently repay any such Indebtedness, and not subsequently reinvested in Additional Assets, to the extent permitted pursuant to Section 4.11 hereof, and (yB) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible Assets, determined as of the date of the incurrence of such Indebtedness;
(2ii) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3iii) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of Permitted Debt;
(4iv) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor, pursuant to an intercompany note in the form of Exhibit G hereto or pursuant to another agreement containing substantially the same subordination provisions as those contained in Section 2.01 of Exhibit G hereto; and
(B) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a pledge or a similar action under a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4iv);
(5v) guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of its Restricted Subsidiaries which that is permitted to be incurred under this Indenture;
(6vi) Indebtedness of the Company or any Restricted Subsidiary that constitutes constitutes: (aA) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate AgreementsAgreements not entered into for speculative purposes; (bB) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, ; and (cC) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating protecting, on a net basis, against price risks, basis risks, or other risks encountered in a Permitted the Oil and Gas Business;
(7vii) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary, in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7vii) outstanding at any time shall not to exceed the greater of (xA) $25.0 million and (yB) 1.52.5% of Adjusted Consolidated Net Tangible Assets; provided further that Assets outstanding at any time, determined as of the principal amount date of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financedIndebtedness;
(8) viii) Indebtedness of the Company or any Restricted Subsidiary under in connection with (aA) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (bB) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8)viii), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (aA) and (bB), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9ix) Indebtedness of the Company or any Restricted Subsidiary with respect to that constitutes obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10x) Indebtedness of the Company to the extent the or any Guarantor provided that sufficient net proceeds thereof are promptly deposited to defease or satisfy all of the Notes pursuant to Article Eight or Article Eleven;
(11xi) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, business or assets of the Company or a Restricted Subsidiary or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12xii) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2ii), (3), (12iii) and this clause (13xii) of this Section 4.07(bparagraph (b);
(13xiii) if Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(xiv) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtand its Restricted Subsidiaries; and
(14xv) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1i) through (13xiv) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.05.0% of Adjusted Consolidated Net Tangible Assets, determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, shall classify or, from time to time, or reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred on or prior to, and outstanding on (after giving effect to is in existence immediately following the application issuance of proceeds of the Initial Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, in an amount not in excess of the amount permitted to be incurred pursuant to clause (i) of paragraph (b) above, shall be deemed to have been incurred pursuant to clause (1i) of paragraph (b) of this Section 4.07 above rather than paragraph (a) above or any other clause of this Section 4.07paragraph (b) above.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (xi) the principal of the such Indebtedness so secured by such letter of credit and (yii) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Brigham Exploration Co)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Revel shall not, and will shall not cause or permit any of its the Restricted Subsidiaries to, directly or indirectly, (1) create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”)) any Indebtedness, or (2) issue any Indebtedness (including any Acquired Debt Disqualified Stock. Notwithstanding the foregoing, Revel and the issuance of Restricted Subsidiaries may incur Indebtedness or issue Disqualified Stock), unless such Indebtedness is incurred by Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio of Revel and the Restricted Subsidiaries for the Revel’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred (such period, the “Reference Period”) would have been at least 2.0 to 1.0, determined on a pro forma basis, including a pro forma application of the net proceeds therefrom and including as set forth in the definition of “Consolidated Coverage Ratio,” as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1Reference Period.
(b) Notwithstanding Section 4.09(a) will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness the incurrence by Revel or any of the Company or any Guarantors (whether as borrowers or guarantors) Restricted Subsidiaries of Indebtedness under one or more the Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under outstanding, to the extent then classified as having been incurred in reliance on this clause (1) not to exceed the greater of (i) $900.0 million less (ii) (x) $1,000.0 million the aggregate amount of all Net Proceeds of Asset Sales or Net Loss Proceeds of Events of Loss applied by Revel or any of the Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness, or repay any revolving credit Indebtedness under the Credit Agreement and effect a corresponding permanent reduction of commitments thereunder pursuant to Section 4.10 or 4.16 or otherwise, and (y) mandatory prepayments of excess cash flow made under the sum Credit Agreement to repay any term Indebtedness, or repay any revolving credit Indebtedness under the Credit Agreement and effect a corresponding permanent reduction of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetscommitments thereunder;
(2) Indebtedness the incurrence by Revel or the Restricted Subsidiaries of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesExisting Indebtedness;
(3) the incurrence by Revel and the Restricted Subsidiaries of Indebtedness of represented by the Company or any Restricted Subsidiary outstanding Notes and the related Note Guarantees to be issued on the Issue Datedate of this Indenture, any PIK Payment, PIK Notes or PIK Interest and any registered Notes issued in exchange therefor pursuant to the Registration Rights Agreement, and not otherwise referred to in this Section 4.07(b)each case including the related Note Guarantees;
(4) the incurrence or assumption by Revel or any of the Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, purchase money obligations or similar obligations, in each case, incurred or assumed for the purpose of financing all or any part of the purchase price or cost of acquisition, design, construction, repair, installation or improvement of property, plant or equipment (including acquisitions of Capital Stock of a Person that becomes a Restricted Subsidiary to the extent of the Fair Market Value of the property, plant or equipment of such Person) used in the Project or any other Permitted Business by Revel or any of the 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 (4), not to exceed $50.0 million at any time outstanding;
(5) Indebtedness in respect of one or more revolving credit facilities in an aggregate principal amount not to exceed at any time outstanding $50.0 million; provided that such Indebtedness shall not be incurred prior to the date that at the time of incurrence and based on the Project schedule then in effect, is reasonably expected to be six months or more prior to the Opening Date;
(6) the incurrence by Revel or any of the Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refinance Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a), under clause (2), (3), (4), or, without duplication, (20) of this Section 4.09(b) or under this clause (6);
(7) the incurrence by Revel or any of the Restricted Subsidiaries of intercompany Indebtedness between or among the Company Revel and any of its the Restricted Subsidiaries; provided, however, that that:
(a) if Revel or any Guarantor is the obligor on such Indebtedness and the payee is not Revel or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of Revel, or its Note Guarantee under this Indenture, in the case of a Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Revel or a Restricted Subsidiary thereof Subsidiary, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Revel or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Revel or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (47);
(5) guarantees of any Indebtedness of 8) the Company incurrence by Revel or any of its the Restricted Subsidiaries which is permitted of Hedging Obligations with respect to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) interest rates entered into in the ordinary course of business (and not for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiariesspeculative purposes); provided that such Hedging Obligations (i) relate to payment obligations on Indebtedness otherwise permitted to be incurred by this Indenture and (ii) the aggregate notional principal amount of such Hedging Obligations at the time incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall does not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any the Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of to which such term, of the acquired or constructed asset or improvement so financedHedging Obligations relate;
(8) Indebtedness 9) the incurrence by Revel or any of the Company Restricted Subsidiaries of Indebtedness (not constituting Indebtedness for borrowed money) in respect of performance, surety, appeal or any Restricted Subsidiary under (a) one similar bonds, guarantees, workers’ compensation claims, self-insurance obligations, municipal bonds, special assessments, bankers’ acceptances or more commercial or standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary similar instruments, in the ordinary course of business (including to support Revel’s and (b) other letters of creditthe Restricted Subsidiaries’ applications for gaming licenses or such claims, suretyobligations, bid, performance, appeal or similar bonds, bankers’ acceptances, completion special assessments or guarantees or similar instrumentsfor the benefit of a trade creditor) in an aggregate principal amount (without duplication) not greater than $25.0 million at any time outstanding; provided that, that in each case contemplated by this the event that Revel or any of the Restricted Subsidiaries enters into the revolving credit facility permitted under clause (8), upon the drawing 5) of such letters of credit or other instrumentthis paragraph, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect amount shall be reduced to clauses $15.0 million;
(a10) and (b), such the incurrence by Revel or any of the Restricted Subsidiaries of Indebtedness is not in connection with the borrowing repurchase, redemption or other acquisition or retirement for value of money Equity Interests of Revel or any Parent Company permitted pursuant to the obtaining provisions of advances clause (6) or credit(14) of Section 4.07(b);
(911) any ERGG Monetization Indebtedness;
(12) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Company or any Restricted Subsidiary ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its incurrence;
(13) Indebtedness arising in connection with respect to obligations relating to oil or gas balancing positions arising endorsement of instruments for deposit in the ordinary course of business;
(1014) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements of Revel or any of the Restricted Subsidiaries providing for indemnification or indemnification, adjustment of purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(1215) Permitted Refinancing the guarantee by Revel or any of the Restricted Subsidiaries of Indebtedness of Revel or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.09;
(16) to the Company extent constituting Indebtedness, agreements to pay service fees to professionals (including architects, engineers and designers) in furtherance of and in connection with the development of the Project, in each case to the extent such agreements and related payment provisions are reasonably consistent with commonly accepted industry practices (provided that no such agreements shall give rise to Indebtedness for borrowed money);
(17) to the extent constituting Indebtedness, the obligations under or payments or advances made under the Transportation Improvement Project Documents;
(18) Contingent Obligations with respect to Indebtedness permitted to be incurred by Revel or any of the Restricted Subsidiaries by another provision of this Section 4.09;
(19) to the extent constituting Indebtedness, (a) agreements for the deferred payment of premiums or to finance the payment of premiums owing by Revel or any Restricted Subsidiary issued under any insurance policies entered into in exchange for, the ordinary course of business in connection with a Permitted Business or the net proceeds of which are used (b) arrangements referred to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph in clause (a18) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(1420) Indebtedness the incurrence or issuance by Revel and/or any of the Company Restricted Subsidiaries of additional Indebtedness or any Restricted Subsidiary Disqualified Stock in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the an aggregate principal amount of all such Indebtedness outstanding (or accreted value, as applicable) at any one time outstanding, including all Permitted Refinancing Indebtedness incurred to refinance any other Indebtedness incurred pursuant to this clause (20), in the an aggregate shall amount of not exceed the greater of (x) more than $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets25.0 million.
(c) For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in clauses (1) through (20) above, or is entitled to be incurred pursuant to 4.09(a), Revel will be permitted to classify such item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include Indebtedness, in any manner that complies with this Section 4.09 as of the amount date of such Indebtedness as one of such types (classification or to divide such Indebtedness between two or more of such types); provided that reclassification. Indebtedness under a the Credit Facility which was incurred on or prior to, and Agreement outstanding on (after giving effect to the application date of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall this Indenture will initially be deemed to have been incurred pursuant to on such date in reliance on the exception provided by clause (1) of paragraph the definition of “Permitted Debt.” In addition, any Indebtedness which is permitted to be incurred by Revel or any of the Restricted Subsidiaries under clause (b4) of Section 4.09(b) may be incurred under the Credit Agreement or through the issuance of Additional Notes under this Section 4.07 rather than paragraph (a) of this Section 4.07Indenture.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual The accrual of interest, the accretion or amortization of original issue discount and discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.074.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Consolidated Interest Expense of Revel as accrued shall be included as required in accrued. Notwithstanding any other provision of this Section 4.09, the calculation maximum amount of Indebtedness that Revel or any of the Consolidated Fixed Charge Coverage Ratio Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of the Companyfluctuations in exchange rates or currency values.
(fe) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyIndebtedness, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; 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 the principal amount of such Indebtedness being refinanced.
(f) 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 respective Indebtedness is denominated that is in effect on the date of such refinancing.
(g) If The amount of any Indebtedness is outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a letter Lien on the assets of credit that serves only to secure such Indebtednessthe specified Person, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of lesser of:
(xi) the principal Fair Market Value of such assets at the Indebtedness so secured by such letter date of credit and (y) the amount that may be drawn under such letter of credit.determination; and
(hii) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAPIndebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (excluding any Additional NotesNotes and Exchange Notes issued in exchange therefor) and any Guarantee of the NotesExisting Senior Notes or the Notes (excluding any Guarantee of Additional Notes and Exchange Notes issued in exchange therefor);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (1211) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-U.S. dollar denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-U.S. dollar equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount For purposes of this Indenture, no Indebtedness issued at will be deemed to be subordinate or junior in right of payment to other Indebtedness solely by virtue of not having the benefit of a price less than Lien on assets, or guarantee of a Person, that benefits the amount other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the liability thereof shall be determined in accordance with GAAPother Indebtedness.
Appears in 1 contract
Sources: Indenture (Laredo Petroleum, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.25 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 250.0 million and (y) the sum of $650.0 100.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (excluding any Additional Notes) and any Guarantee of the Existing Senior Notes or the Notes (excluding any Guarantee of Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of by the Company or any Guarantor of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) any Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant is permitted to Interest Rate Agreements, but only to be incurred under the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted BusinessIndenture;
(76) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 million and (y) 1.52.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight Seven or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article ElevenTen;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (1211) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 35.0 million and (y) 3.02.5% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of SFAS 133), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-U.S. dollar denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-U.S. dollar equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount For purposes of the liability thereof shall Indenture, no Indebtedness will be determined deemed to be subordinate or junior in accordance with GAAPright of payment to other Indebtedness solely by virtue of not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the other Indebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including Acquired Debt), the Issuer will not issue any Acquired Debt Disqualified Stock, and the issuance Issuer will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Stock); provided, unless however, that the Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if, for the most recently ended Test Period immediately preceding the date on which such additional Indebtedness is incurred by the Company or any Guarantor and, in each casesuch Disqualified Stock is issued, the Company’s Consolidated Fixed Charge Coverage Ratio for would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding net proceeds therefrom), as if the incurrence additional Indebtedness had been incurred or Disqualified Stock had been issued, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1Test Period.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):) or the issuance of any Disqualified Stock described below:
(1) Indebtedness of (i) the Company incurrence by the Issuer or any Guarantors of its Restricted Subsidiaries of Warehouse Indebtedness, (whether as borrowers ii) the incurrence of any Indebtedness subject to the Alternative Financing Trigger and/or (iii) the incurrence by the Issuer or guarantorsany of its Restricted Subsidiaries of Indebtedness (including guarantees and letters of credit) under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this sub-clause (iii) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Subsidiaries thereunder) then outstanding at any one time outstanding under this clause (1) does not to exceed the greater of (xa) $1,000.0 million 125,000,000 and (yb) the sum of $650.0 million and 25.015.0% of Adjusted the Issuer’s Consolidated Net Tangible AssetsTotal Assets determined at the time of such incurrence;
(2) the incurrence by the Issuer and the Guarantors of Indebtedness of represented by the Company or Initial Notes, any Guarantor pursuant to PIK Notes issued as PIK Payments on the Initial Notes (excluding any Additional Notes) and any Guarantee of the Notesrelated Note Guarantees;
(3) Indebtedness the incurrence by the Issuer or its Restricted Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, Existing Indebtedness other than Indebtedness described in clauses (1) and not otherwise referred to in (2) of this Section 4.07(b4.09(b);
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Finance Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Issuer or any of its Restricted Subsidiaries of Disqualified Stock, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other assets used in the business of the Issuer or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (4), provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (4) and then outstanding does not exceed the greater of (a) $35.0 million and (b) 4.5% of the Issuer’s Consolidated Total Assets determined at the time of such incurrence;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to, extend, refinance, renew, replace, defease or refund Indebtedness that was permitted by this Indenture to be incurred (or Disqualified Stock permitted to be issued) under Section 4.09(a) hereof or clauses (2), (3), (4), (11), (12), (17) or (22) of this Section 4.09(b) or this subclause 4.09(b)(5);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that that:
(A) if the Issuer is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Issuer nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Guarantor; and
(B) (i) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Issuer or a Restricted Subsidiary thereof of the Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Issuer nor a Restricted Subsidiary thereof, shall of the Issuer will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4subclause 4.09(b)(6);
(57) guarantees of any Indebtedness of the Company incurrence by the Issuer or any of its Restricted Subsidiaries which is of obligations under Hedging Contracts in the ordinary course of business and not for speculative purposes, including any obligations with respect to letters of credit issued in connection therewith;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries of Indebtedness of the Issuer or any of its Restricted Subsidiaries that was permitted to be incurred under by another provision of this IndentureSection 4.09;
(69) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of the Company or Issuer and any of its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Subsidiaries in the ordinary course of business, including guarantees and obligations of the Issuer or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business each case other than an obligation for the purpose of mitigating against risks encountered in a Permitted Businessmoney borrowed);
(710) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of any Disqualified Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock being held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer; and
(B) any sale or other transfer of any such Disqualified Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, shall be deemed, in each case, to constitute an issuance of such Disqualified Stock by such Restricted Subsidiary that was not permitted by this subclause 4.09(b)(10);
(11) the incurrence or issuance by the Issuer or any of its Restricted Subsidiaries of (a) Indebtedness or Disqualified Stock of the Company Issuer or a Restricted Subsidiary incurred to finance an acquisition and (b) Acquired Debt incurred by the Issuer or a Restricted Subsidiary, provided that, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Secured Leverage Ratio test set forth in Section 4.09(a) hereof or (ii) the Secured Leverage Ratio for the Issuer would not be less than immediately prior to such transactions;
(12) the incurrence by the Issuer or any of its Restricted Subsidiary represented Subsidiaries of additional Indebtedness or the issuance by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all Issuer or any part of the purchase price its Restricted Subsidiaries of Disqualified Stock, provided that, after giving effect to any such incurrence or cost of acquisitionissuance, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred by the Company or any Restricted Subsidiary pursuant to subclause (5) of this Section 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred or Disqualified Stock issued under this clause (7) outstanding at any time shall 12), does not exceed the greater of (x) $25.0 45.0 million and (y) 1.55.5% of Adjusted the Issuer’s Consolidated Net Tangible Total Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) 13) Indebtedness of incurred by the Company Issuer or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company Issuer to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes pursuant to Article Eight or Article Elevenin accordance with this Indenture;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company Issuer or any Restricted Subsidiary of the Issuer consisting of obligations to pay insurance premiums or take-or-pay obligations contained in addition to that described supply arrangements incurred in clauses the ordinary course of business;
(115) through (13) aboveIndebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business;
(16) Guarantees (a) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees that, in each case, are non-Affiliates or (b) otherwise constituting Investments not prohibited under this Indenture,
(17) Indebtedness issued by the Issuer or any renewalsof its Restricted Subsidiaries to any current, extensionsfuture or former director, substitutionsofficer, refinancings consultant or replacements employee of the Issuer, the Issuer, any other direct or indirect parent of the Issuer or any Restricted Subsidiary of the Issuer (or any of their Affiliates), or their estates or the beneficiaries of such Indebtednessestates to finance the purchase, so long as the redemption, acquisition or retirement for value of Equity Interests permitted by Section 4.07(b)(5) hereof, in an aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07outstanding, in the event that an item of including all Permitted Refinancing Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause subclause (1) of paragraph (b5) of this Section 4.07 rather than paragraph 4.09(b) to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (a17), not to exceed the amount of Equity Interests permitted to be purchased, redeemed, acquired or retired pursuant to Section 4.07(b)(5) of this Section 4.07.hereof;
(d18) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted incurred in part by one such provision connection with any Sale and in part by one Leaseback Transaction and any refinancing, refunding, renewal or more other provisions extension of this Section 4.07 permitting any such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and provided that, except to the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currencyextent otherwise permitted hereunder, the dollar-equivalent principal amount of any such Indebtedness incurred pursuant thereto shall be calculated based on is not increased above the relevant currency exchange rate in effect on principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant direct and contingent obligors with respect to such Indebtedness are not changed;
(19) Indebtedness in respect of overdraft facilities, employee credit card programs and such letter other cash management arrangements in the ordinary course of credit shall be equal business;
(20) Indebtedness representing deferred compensation to the greater of (x) the principal employees of the Indebtedness so secured by such letter Issuer (or any direct or indirect parent of credit the Issuer) and (y) its Restricted Subsidiaries incurred in the amount that may be drawn under such letter ordinary course of credit.business;
(h21) The amount Indebtedness in respect of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.Treasury Management Arrangements; and
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will and its Subsidiaries shall not, and will not cause directly or permit any of its Restricted Subsidiaries to, indirectly create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “"incur”)" and, correlatively, "incurred" and "incurrence") any Indebtedness (including including, without limitation, Acquired Debt) or issue any Disqualified Stock; provided, however, that the Company and/or any of its Subsidiaries may incur Indebtedness (including, without limitation, Acquired Debt and Debt) or issue shares of Disqualified Stock if, after giving effect to the incurrence of such Indebtedness or the issuance of such Disqualified Stock), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Cash Flow Leverage Ratio for the Company's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of such incurrence or issuance: (x) does not exceed 5.5 to 1 if such incurrence or issuance occurs on or prior to June 1, 1999; and (y) does not exceed 5.0 to 1 if such incurrence or issuance occurs after June 1, 1999, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. If the Company incurs any Indebtedness or issues or redeems any Preferred Stock subsequent to the commencement of the period for which such ratio is being calculated but prior to the event for which the calculation of the ratio is made, then the ratio will be calculated giving pro forma effect to any such incurrence of Indebtedness, or such issuance or redemption of Preferred Stock, as if the same had occurred at the beginning of the applicable period. In making such calculation on a pro forma basis, interest attributable to Indebtedness taken bearing a floating interest rate shall be computed as one period is at least equal to or greater than 2.25:1if the rate in effect on the date of computation had been the applicable rate for the entire period.
(b) Notwithstanding the foregoing, the Company and, The foregoing limitation in Section 4.09(a) shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur (with each and all of the following (collectively, the “Permitted Debt”exception to be given independent effect):
(1i) Indebtedness of the incurrence by the Company or and/or any Guarantors (whether as borrowers or guarantors) of its Subsidiaries of Indebtedness under one or more a Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the 44 50 Company and/or any of its Subsidiaries thereunder) not to exceed $150.0 million in the greater aggregate at any one time outstanding, less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently reduce the commitments with respect to such Indebtedness pursuant to Section 4.10 hereof;
(x) $1,000.0 million and (yii) the sum incurrence by the Company and/or any of $650.0 million and 25.0its Subsidiaries of Vendor Indebtedness, provided that the aggregate amount of such Vendor Indebtedness incurred does not exceed 80% of Adjusted Consolidated Net Tangible Assetsthe total cost of the Telecommunications Related Assets financed therewith (or 100% of the total cost of the Telecommunications Related Assets financed therewith if such Vendor Indebtedness was extended for the purchase of tangible physical assets and was so financed by the vendor thereof or an affiliate of such vendor);
(iii) the incurrence by the Company and/or any of its Subsidiaries of the Existing Indebtedness, including the Existing Senior Notes;
(iv) the incurrence by the Company and/or any of its Subsidiaries of Indebtedness in an aggregate amount not to exceed $50.0 million at any one time outstanding;
(v) the incurrence by the Company of Indebtedness, but only to the extent that such Indebtedness has a final maturity no earlier than, and a Weighted Average Life to Maturity equal to or greater than, the final maturity and Weighted Average Life to Maturity, respectively, of the Senior Notes, in an aggregate principal amount not to exceed 2.0 times the net cash proceeds received by the Company after June 30, 1996 from the issuance and sale of Equity Interests of the Company (that are not Disqualified Stock) plus the fair market value of Equity Interests (other than Disqualified Stock) issued after June 30, 1996 in connection with any acquisition of any Telecommunications Business;
(vi) the incurrence (a "Permitted Refinancing") by the Company and/or any of its Subsidiaries of Indebtedness issued in exchange for, or the proceeds of which are used to refinance, replace, refund or defease ("Refinance" and correlatively, "Refinanced" and "Refinancing") Indebtedness, other than Indebtedness incurred pursuant to clause (i) above, but only to the extent that:
(1) the net proceeds of such Refinancing Indebtedness do not exceed the principal amount of and premium, if any, and accrued interest on the Indebtedness so Refinanced (or if such Indebtedness was issued at an original issue discount, the original issue price plus amortization of the original issue discount at the time of the repayment of such Indebtedness) plus the fees, expenses and costs of such Refinancing and reasonable prepayment premiums, if any, in connection therewith;
(2) the Refinancing Indebtedness shall have a final maturity no earlier than, and a Weighted Average Life to Maturity equal to or greater than, the final maturity and Weighted Average Life to Maturity of the Indebtedness being Refinanced; and
(3) if the Indebtedness being Refinanced is subordinated in right of payment to the Senior Notes, the Refinancing Indebtedness shall be subordinated in right of payment to the Senior Notes on terms at least as favorable to the holders of Senior Notes as those contained in the documentation governing the Indebtedness being so Refinanced;
(vii) the incurrence by the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness its Subsidiaries of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5viii) guarantees of any Indebtedness of the incurrence by the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary Hedging Obligations that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case are incurred for the purpose of financing, refinancing, renewing, defeasing fixing or refunding all hedging interest rate or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that foreign currency risk with respect to clauses (a) and (b), such any floating rate Indebtedness that is not in connection with permitted by the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) terms of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant Indenture to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtbe outstanding; and
(14ix) Indebtedness of the incurrence by the Company or any Restricted Subsidiary of Indebtedness represented by the Senior Notes and the Senior Subordinated Notes, in addition to that described in clauses (1) through (13) aboveeach case, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as issued on the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) Issue Date. For purposes of determining compliance with this Section 4.074.09, in the event that an item of Indebtedness or Disqualified Stock meets the criteria of more than one of the types of Indebtedness permitted by this categories described in clauses (i) through (ix) above or is entitled to be incurred pursuant to Section 4.074.09(a), the Company shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness in any manner that complies with this Section and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, item shall be deemed to have treated as having been incurred pursuant to clause (1) only one of paragraph (b) of this such clauses or pursuant to Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) 4.09(a). Accrual of interestinterest or dividends, the accretion of accreted value or amortization of original issue discount liquidation preference and the payment of interest on any Indebtedness or dividends in the form of additional Indebtedness with the same termsIndebtedness, and the accretion or payment of dividends on any Disqualified Common Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the CompanySection.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Senior Note Indenture (Intermedia Communications Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries Subsidiary to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt and the issuance of Disqualified StockStock or the issuance of Preferred Stock by a Restricted Subsidiary), unless such Indebtedness is incurred by the Company or any Guarantor and, in each case, after giving pro forma effect to such incurrence and the receipt and application of the proceeds therefrom, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least would be equal to or greater than 2.25:12.0 to 1.0.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 725.0 million and (y) the sum of $650.0 250.0 million and 25.030% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness and (z) the Borrowing Base as of such date;
(2) Indebtedness of the Company or any Guarantor pursuant to the Existing Senior Notes or the Notes (excluding any Additional Notes) and any Guarantee of the Existing Senior Notes or the Notes (excluding any Guarantee of Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that that:
(ia) if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is owed to a Restricted Subsidiary other than a Guarantor, such Indebtedness shall be either (x) expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes, in the case of the Company, or the Guarantees, in the case of a Guarantor, or (y) Capital Stock; and
(b) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof (other than pursuant to a Credit Facility) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Guarantor of any Indebtedness of the Company or any of its Restricted Subsidiaries which Subsidiary that is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property property, in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding Refinancing all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount incurred by the Company or outstanding at any Restricted Subsidiary time pursuant to this clause (76) outstanding at any time shall not to exceed the greater of (x) $25.0 30.0 million and (y) 1.53.0% of Adjusted Consolidated Net Tangible Assets; provided further that Assets determined as of the principal amount date of any Indebtedness permitted under this clause the incurrence of such Indebtedness;
(7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other self-insurance obligations, letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments and any guarantees or letters of credit functioning as or supporting any of the foregoing instruments; provided that, in each case contemplated by this clause (8)7), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 30 days following such drawing; provided, further, provided further that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or creditmoney;
(9) 8) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the Guarantor; provided that sufficient net proceeds thereof are promptly deposited to defease effect a Legal Defeasance or satisfy Covenant Defeasance with respect to all of the Notes pursuant to Article Eight or a Satisfaction and Discharge with respect to all of the Notes pursuant to Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(129) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary Guarantor issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, Refinance any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (aSection 4.07(a) of this Section 4.07 and clauses or clause (2), (3), (1211) and or this clause (139) of this paragraph (b) of this Section 4.07(b)4.07;
(10) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(11) Permitted Acquisition Indebtedness;
(12) Cash Management Obligations of the Company or any Guarantor in an aggregate amount not to exceed $7.5 million outstanding at any one time;
(13) if Preferred Stock (other than Disqualified Stock) of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debtor any Restricted Subsidiary; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (14) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 40.0 million and (y) 3.04.0% of Adjusted Consolidated Net Tangible AssetsAssets determined as of the date of the incurrence of such Indebtedness.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Indebtedness “Permitted Debt” or is permitted by to be incurred pursuant to paragraph (a) of this Section 4.07, the Company in its sole discretion may, at any time, may classify or, from time to time, or reclassify all (or any portion of later classify or reclassify) in whole or in part such item of Indebtedness in any manner (including by dividing and only be required to include the amount classifying such item of such Indebtedness as in more than one type of such types (or to divide such Indebtedness between two or more of such types)permitted under this Section 4.07) that complies with this Section 4.07; provided that Indebtedness under a the Senior Credit Facility Agreement, if any, which was incurred is in existence on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, Date shall be deemed to have been considered incurred pursuant to under clause (1) of paragraph (b) of this Section 4.07 rather than 4.07, subject to any subsequent classification or reclassification or division permitted pursuant to this paragraph (a) of this Section 4.07c).
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount or accretion of principal as to a security issued at a discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock Stock, the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness, and unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC 815), each will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the U.S. dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; 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 the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section 4.07 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates 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 Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
(g) For purposes of determining any particular amount of Indebtedness under this Section 4.07, (i) guarantees of, or obligations in respect of letters of credit relating to, Indebtedness otherwise included in the determination of such amount shall not also be included and (ii) if obligations in respect of letters of credit are incurred pursuant to a Credit Facility and are being treated as incurred pursuant to clause (1) of the definition of “Permitted Debt” and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included. If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the such Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount For purposes of this Indenture, no Indebtedness issued at will be deemed to be subordinate or junior in right of payment to other Indebtedness solely by virtue of not having the benefit of a price less than Lien on assets, or guarantee of a Person, that benefits the amount other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefiting the liability thereof shall be determined in accordance with GAAPother Indebtedness.
Appears in 1 contract
Sources: Indenture (Laredo Petroleum, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock.
(a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurindirectly, contingently or otherwise (collectively, “incur”), Incur any Indebtedness (including any Acquired Debt Indebtedness), provided, however, that the Company and the issuance of Disqualified Stock)Guarantors may Incur Indebtedness, unless such Indebtedness is incurred by if on the Company or any Guarantor and, in each casedate thereof and after giving effect thereto on a pro forma basis, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period Company and its Restricted Subsidiaries is at least equal 2.00 to or greater than 2.25:11.00.
(b) Notwithstanding The provisions of Section 4.08(a) shall not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all Incurrence of the following (collectively, the “Permitted Debt”):Indebtedness:
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the Notes;
(3i) Indebtedness of the Company or any Restricted Subsidiary Incurred under a Credit Facility and the issuance and creation of letters of credit, bankers’ acceptances, performance or surety bonds and other similar instruments thereunder; provided that the aggregate principal amount of Indebtedness Incurred and outstanding on the Issue Date, and not otherwise referred pursuant to in this Section 4.07(b4.08(b)(i), when taken together with the aggregate principal amount of Indebtedness Incurred and outstanding pursuant to Section 4.08(b)(viii), does not to exceed $400.0 million in the aggregate;
(4ii) intercompany Indebtedness between or among represented by the Initial Notes and the related Note Guarantees;
(iii) Indebtedness of the Company and any of its Restricted SubsidiariesSubsidiaries in existence on the Initial Issuance Date (other than Indebtedness described in clauses (i), (ii), (vi), (v), (vii), (ix), (x) and (xi) of Section 4.08(b));
(iv) Guarantees by (a) the Company or Guarantors of Indebtedness permitted to be Incurred by the Company or a Guarantor in accordance with the provisions of this Indenture; provided that in the event such Indebtedness that is being Guaranteed is a Subordinated Obligation or a Guarantor Subordinated Obligation, then the related Guarantee shall be subordinated in right of payment to the Notes or the Note Guarantee, as the case may be, and (b) Non-Guarantors of Indebtedness Incurred by Non-Guarantors in accordance with the provisions of this Indenture;
(v) Indebtedness of the Company owing to and held by any of its Restricted Subsidiaries 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,
(1) if the Company is the obligor on Indebtedness owing to a Non- Guarantor, that such Indebtedness is expressly subordinated in right of payment to all Obligations with respect to the Notes;
(i2) if a Guarantor is the obligor on such Indebtedness and a Non- Guarantor is the obligee, such Indebtedness is expressly subordinated in right of payment to the Note Guarantee of such Guarantor; and
(3) (A) any subsequent issuance or transfer of Capital Stock that or any other event which results in any such Indebtedness being beneficially held by a Person other than the Company or a any of its Restricted Subsidiary thereof Subsidiaries; and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either other than the Company or a any of its Restricted Subsidiary thereofSubsidiaries, shall be deemed, in each casecase under this Section 4.08(b)(v)(3), to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be;
(vi) Indebtedness of (x) any Person Incurred and outstanding on the date on which such Person became a Restricted Subsidiary of the Company or was acquired by, or merged into or amalgamated, arranged or consolidated with, the Company or any of its Restricted Subsidiaries or (y) such Persons or the Company or any of its Restricted Subsidiaries Incurred (1) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary of the Company or otherwise was acquired by, or merged into or consolidated with the Company or (2) otherwise in connection with, or in contemplation of, such acquisition, merger or consolidation; provided, however, in each case set forth in clause (x) or (y), that at the time such Person is acquired or such Indebtedness was not permitted by Incurred, either:
(1) the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.08(a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause Section 4.08(b)(vi); or
(42) the Consolidated Coverage Ratio of the Company and its Restricted Subsidiaries would have been at least the same or greater than such ratio immediately prior to such acquisition, merger or consolidation, in each case after giving effect to the Incurrence of such Indebtedness pursuant to this Section 4.08(b)(vi);
(5vii) guarantees Indebtedness under Hedging Obligations that are Incurred not for speculative purposes;
(viii) Indebtedness (including Capitalized Lease Obligations) of the Company or any of its Restricted Subsidiaries Incurred to finance the purchase, design, lease, construction, repair, replacement or improvement of any property (real or personal), plant or equipment used or to be used in a Similar Business through the direct purchase of such property, plant or equipment, and any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted that serves to be incurred under refund or refinance any Indebtedness Incurred pursuant to this Indentureclause (viii); provided that the aggregate principal amount of Indebtedness Incurred and outstanding pursuant to this Section 4.08(b)(viii), when taken together with the aggregate principal amount of Indebtedness Incurred and outstanding pursuant to Section 4.08(b)(i), does not to exceed $400.0 million in the aggregate;
(6ix) Indebtedness Incurred by the Company or any of its Restricted Subsidiaries in respect of (a) worker’s compensation claims, health, disability or other employee benefits; (b) property, casualty or liability insurance self-insurance obligations; and (c) statutory, appeal, completion, export, import, customs, revenue, performance, bid, surety and similar bonds and completion Guarantees (not for borrowed money) provided in the ordinary course of business and reimbursement obligations relating to same;
(x) Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earn- out or similar obligations, in each case, Incurred or assumed in connection with the disposition or acquisition of any business or assets of the Company or any business, assets or Capital Stock of any of its Restricted Subsidiaries, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(xi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of Incurrence;
(xii) Indebtedness in the form of letters of credit and reimbursement obligations relating to letters of credit that are satisfied within 30 days of being drawn;
(xiii) the Incurrence or issuance by the Company or any of its Restricted Subsidiaries of Refinancing Indebtedness that serves (or will serve) to refund or refinance any Indebtedness Incurred as permitted under Section 4.08(a) and Section 4.08(b), (ii), (iii) or (vi) or this Section 4.08(b)(xiii), or any Indebtedness issued to so refund or refinance such Indebtedness, including additional Indebtedness Incurred to pay premiums (including reasonable, as determined in good faith by Senior Management, tender premiums), defeasance costs, accrued interest and fees and expenses in connection therewith;
(xiv) Indebtedness of the Company or any of its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% Subsidiaries consisting of the aggregate principal amount financing of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into insurance premiums incurred in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7xv) Indebtedness of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not Subsidiaries consisting of take-or-pay obligations contained in supply arrangements incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business ordinary course of business;
(xvi) Indebtedness of the Company or any of its SubsidiariesRestricted Subsidiaries with respect to Guarantees of Indebtedness of joint ventures, in an aggregate amount under this clause (xvi) not to exceed the greater of (x) $60.0 million and (y) 5.0% of Total Assets, at any time outstanding;
(xvii) Non-Recourse Debt;
(xviii) Indebtedness of the Company, to the extent the net proceeds thereof are promptly used to purchase the Notes tendered in connection with a Change of Control Offer; provided that and
(xix) other Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount incurred by which, when taken together with the Company or any Restricted Subsidiary principal amount of all other Indebtedness Incurred pursuant to this clause (7xix) outstanding at any time shall and then outstanding, will not exceed the greater of (x) $25.0 100.0 million and (y) 1.510.0% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of Total Assets at any time outstanding.
(c) Notwithstanding anything in this Section 4.08:
(i) The Company will not Incur any Indebtedness permitted under this clause Section 4.08(b) if the proceeds thereof are used, directly or indirectly, to refinance any Subordinated Obligations of the Company unless such Indebtedness will be subordinated to the Notes to at least the same extent as such Subordinated Obligations.
(7ii) did not in each case at No Guarantor will Incur any Indebtedness under Section 4.08(b) if the time of incurrence exceed the Fair Market Valueproceeds thereof are used, as determined in accordance with the definition directly or indirectly, to refinance any Guarantor Subordinated Obligations of such term, Guarantor unless such Indebtedness will be subordinated to the obligations of such Guarantor under its Note Guarantee to at least the same extent as such Guarantor Subordinated Obligations.
(iii) No Restricted Subsidiary of the acquired or constructed asset or improvement so financed;
Company (8) other than a Guarantor) may Incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor.
(iv) The Company will not permit any of its Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of Disqualified Stock, other than Non-Recourse Debt. If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary under (a) one or more standby letters of credit issued the Company, any Indebtedness of such Subsidiary shall be deemed to be Incurred by or for the account a Restricted Subsidiary of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing as of such letters of credit or other instrumentdate (and, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), if such Indebtedness is not in connection with the borrowing permitted to be Incurred as of money or the obtaining of advances or credit;
(9) Indebtedness of such date under Section 4.08 the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising will be in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) Default of this Section 4.07 and clauses (24.08), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(cd) For purposes of determining compliance with with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 4.07, 4.08:
(i) in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by described in the second paragraph of this Section 4.074.08, the Company in its sole discretion maydiscretion, at any time, will classify or, from time to time, reclassify all or any portion of such item of Indebtedness on the date of Incurrence and may later classify such item of Indebtedness in any manner that complies with Section 4.08(b) and only be required to include the amount and type of such Indebtedness as in one of such types clauses under Section 4.08(b);
(ii) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
(iii) if obligations in respect of letters of credit are Incurred pursuant to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on and are being treated as Incurred pursuant to Section 4.08(b)(1) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;
(iv) the principal amount associated with any Disqualified Stock of the Company or prior toany of its Restricted Subsidiaries, and outstanding on (after giving effect or Preferred Stock of a Non-Guarantor, will be equal to the application greater of proceeds of Notes)the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements liquidation preference thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.;
(dv) Indebtedness permitted by this Section 4.07 4.08 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 covenant permitting such Indebtedness; and
(vi) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
(e) Accrual of interest, accrual of dividends, the accretion or of accreted value, the amortization of original issue discount and debt discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Preferred Stock or Preferred Disqualified Stock will not be deemed to be an incurrence Incurrence of Indebtedness for purposes of this Section 4.07; provided4.08. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount the aggregate principal amount outstanding in the case of Indebtedness issued with interest payable in kind and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in each such case, that the amount thereof as accrued shall be included as required in the calculation case of the Consolidated Fixed Charge Coverage Ratio of the Companyany other Indebtedness.
(f) 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, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto currency shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is secured by Incurred to refinance other Indebtedness denominated in a letter 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 credit that serves only such refinancing, such U.S. dollar-denominated restriction shall be deemed not to secure have been exceeded so long as the principal amount of such Indebtedness, then Refinancing Indebtedness does not exceed the total principal amount deemed incurred pursuant to of such Indebtedness and such letter being refinanced. Notwithstanding any other provision of credit shall be equal to this Section 4.08, the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The maximum amount of Indebtedness issued at that the Company may Incur pursuant to this Section 4.08 shall not be deemed to be exceeded solely as a price less than 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 liability thereof Indebtedness being refinanced, shall be determined calculated based on the currency exchange rate applicable to the currencies in accordance with GAAPwhich such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Partnership shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Partnership shall not issue any Disqualified Stock and the Partnership will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of this Indebtedness, the Partnership may incur Indebtedness (including Acquired Debt) or the Partnership may issue shares of Disqualified Stock), unless such Indebtedness is incurred by if (x) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Partnership’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which that additional Indebtedness is incurred, would have been at least 2.0 to 1, determined on a pro-forma basis (including a pro-forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of the four-quarter period and (y) no Default or Event of Default shall have occurred and be continuing at the time of or would occur after giving pro forma effect to such incurrence or issuance and the application of proceeds therefrom. The first paragraph of this Section 4.09 shall not prohibit the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following (collectively, the “Permitted Debt”):
(1a) Indebtedness represented by the Notes to be issued on the date of this Indenture and any PIK Notes issued from time to time to pay PIK Interest in accordance with the terms of this Indenture, and (b) the respective obligations of the Company or any Guarantors Partnership and its Restricted Subsidiaries arising under the Collateral Documents to the extent such obligations would represent Indebtedness;
(whether as borrowers or guarantors2) under Indebtedness incurred pursuant to one or more Credit Facilities in an aggregate principal amount outstanding at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 80.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
(2) Indebtedness of the Company or less any Guarantor permanent reductions made pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesSection 4.10 hereof;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Existing Indebtedness;
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any Restricted Subsidiary of its the Company, Restricted Subsidiaries Affiliate or Restricted Subsidiary of a Restricted Affiliate to, directly or indirectly, create, incur, issue, incur, assume, guarantee guaranty or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise with respect to (collectively, “"incur”), ") any Indebtedness (including Acquired Debt) and that the Company will not issue any Disqualified Stock and will not permit any Restricted Subsidiary of the Company, Restricted Affiliate or Restricted Subsidiary of a Restricted Affiliate to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt and the issuance Debt), or issue shares of Disqualified Stock, if: (i) the Company's Consolidated Debt to Consolidated Cash Flow Ratio is less than 6.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), unless as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of the applicable four quarter period; or (ii) the Company's Consolidated Debt does not exceed 30% of the Company's Total Market Capitalization, calculated as of the date of incurrence or issuance and on a pro forma basis after giving effect to such Indebtedness is incurred incurrence or issuance (including a pro forma application of the net proceeds therefrom). The provisions of the foregoing paragraph will not apply to (a) Existing Indebtedness; (b) commitments existing as of the date hereof by the Company and its Subsidiaries relating to capital contributions to Omnitel or any Guarantor and, in each case, OPI (including the Company’s Consolidated Fixed Charge Coverage Ratio for the most recently-ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
funding commitments under OPI's performance bond); (b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 million and (yc) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assets;
Notes; (2d) Indebtedness of the Company or any Guarantor pursuant to the Notes Convertible Subordinated Notes; (excluding any Additional Notes) and any Guarantee of the Notes;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent permitted by the net proceeds thereof are promptly deposited to defease or satisfy other provisions of this Indenture; (f) the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness incurrence by the Company, a Restricted Subsidiary of the Company or any Company, a Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company Affiliate or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Affiliate of Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, extend, substitute, defease, refund, refinance or replace, any Indebtednessredeem, including any Disqualified Stockdefease or refund other Indebtedness of the Company, incurred pursuant to paragraph a Restricted Subsidiary of the Company, a Restricted Affiliate or a Restricted Subsidiary of a Restricted Affiliate; (ag) the incurrence by a Restricted Subsidiary of this Section 4.07 the Company, a Restricted Affiliate or a Restricted Subsidiary of a Restricted Affiliate of Project Financing, provided that no single Restricted Subsidiary (together with its consolidated Restricted Subsidiaries and clauses its Restricted Affiliates) and no single Restricted Affiliate (2together with its consolidated Restricted Subsidiaries and its Restricted Affiliates), (3)pro forma for such incurrence and the application of the net proceeds therefrom, (12) and (13) may, on the date of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the have an aggregate principal amount of all Project Financing outstanding, determined without duplication, that exceeds the greater of (1) 5.0x the Consolidated Cash Flow of such Restricted Subsidiary or Restricted Affiliate for the most recently completed four full fiscal quarters for which internal financial statements are available as of the date of such incurrence (calculated on a pro forma basis as if such Project Financing had been incurred and the proceeds therefrom applied at the beginning of the applicable four-quarter period) or (2) 200% of the Consolidated Invested Equity Capital of such Restricted Subsidiary or Restricted Affiliate at such time; (h) the incurrence by the Company of Subordinated Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any one time outstanding (with each issue measured as of the date of its incurrence and without giving effect to subsequent accretion) not to exceed $20 million (or the equivalent amount in one or more foreign currencies); (i) Guarantees by the Company or a Restricted Subsidiary of the Company of up to $10 million in principal amount of Project Financing of the Company's Restricted Subsidiaries, Restricted Affiliates or Restricted Subsidiaries of its Restricted Affiliates at any one time outstanding and related accrued interest; (j) to the extent an Investment is permitted to be made by the Company or a Restricted Subsidiary of the Company, Restricted Affiliate or Restricted Subsidiary of a Restricted Affiliate under Section 4.07 hereof, Guarantees by the Company or such Restricted Subsidiary of the Company, Restricted Affiliate or Restricted Subsidiary of a Restricted Affiliate of its obligation to make such Investment; (k) the incurrence by the Company of additional Subordinated Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any one time outstanding (with each issue measured at the date of its incurrence and without giving affect to subsequent accretion) not to exceed two times the amount (or the equivalent amount in one or more foreign currencies) of Equity Offering Proceeds that have been received by the Company since the date hereof and not used to fund Restricted Payments; (l) Non-Recourse Pledges in connection with Project Financings; (m) Hedging Obligations so long as such obligations relate to, and do not have a notional amount greater than, obligations permitted hereunder in respect of Indebtedness or commitments to make Investments; (n) any Indebtedness outstanding from time to time under a Credit Facility; provided, the aggregate amount of such Indebtedness outstanding at any one time in the aggregate shall not exceed $25 million; (o) Purchase Money Debt, provided the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the aggregate amount of such Indebtedness as one outstanding at any time shall not exceed $25 million; (p) additional Indebtedness of such types the Company or its Restricted Subsidiaries, Restricted Affiliates or Restricted Subsidiaries of Restricted Affiliates, in an aggregate principal amount (or accreted value, as applicable) not to divide such exceed $20 million at any one time outstanding; (q) additional Indebtedness between two (other than Subordinated Indebtedness) of the Company or more its Restricted Subsidiaries, Restricted Affiliates or Restricted Subsidiaries of such types)Restricted Affiliates, in an aggregate principal amount (or accreted value, as applicable) not to exceed the excess, if any, of (1) the amount of Implied POP Senior Indebtedness less (2) $240 million; provided that and (r) additional Subordinated Indebtedness under in an aggregate principal amount (or accreted value, as applicable) not to exceed the excess, if any, of (1) the amount of Implied POP Subordinated Indebtedness less (2) $75 million. The Board of Directors may designate a Credit Facility which was incurred on Restricted Subsidiary of the Company or prior toof a Restricted Affiliate to be an Unrestricted Subsidiary and may designate a Restricted Affiliate to be an Unrestricted Affiliate if no Default or Event of Default shall have occurred and be continuing, and outstanding on (if, after giving pro forma effect to the application of proceeds of Notes)such designation, the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to Company would have been incurred permitted to make at least $1.00 of additional Investments pursuant to clause (1f) of paragraph (b) the definition of this Section 4.07 rather than paragraph (a) Permitted Investments. Upon the designation of this Section 4.07.
(d) Indebtedness permitted any Restricted Subsidiary as an Unrestricted Subsidiary, or the designation of any Restricted Affiliate as an Unrestricted Affiliate, all previous Investments by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount the Company and the payment Company's Pro Rata Portion of interest on any Indebtedness Investments by any of its Restricted Subsidiaries or Restricted Affiliates in the form of additional Indebtedness with the same terms, and the accretion such Restricted Subsidiary or payment of dividends on any Disqualified Stock or Preferred Stock Restricted Affiliate (in the form of additional shares of the same class of Disqualified Stock or Preferred Stock all other cases) will not be deemed to be constitute an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect Investment made on the date that of such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtednessdesignation in an Unrestricted Subsidiary or Unrestricted Affiliate, then the total as applicable, in an amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater greatest of (x) the principal aggregate original fair market value of such Investments (or the Indebtedness so secured Company's Pro Rata Portion thereof, as applicable) as determined in good faith by such letter the Company's Board of credit and Directors, (y) the amount that may be drawn under net book value of such letter Investments at the time of credit.
such designation (hor the Company's Pro Rata Portion thereof, as applicable), and (z) The amount the fair market value of Indebtedness issued such Investments at a price less than the amount time of such designation (or the liability thereof shall be Company's Pro Rata Portion thereof, as applicable) as determined in accordance good faith by the Company's Board of Directors. Such designation will only be permitted if such Investment (or the Company's Pro Rata Portion thereof, as applicable) would be permitted at such time by the terms under Section 4.07 hereof and if such Restricted Subsidiary or Restricted Affiliate otherwise meets the definition of an Unrestricted Subsidiary or an Unrestricted Affiliate, as applicable, and has no Indebtedness other than Non-Recourse Debt with GAAPrespect to the Company and its Restricted Subsidiaries, its Restricted Affiliates and Restricted Subsidiaries of Restricted Affiliates.
Appears in 1 contract
Sources: Indenture (Cellular Communications International Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Borrower shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, issue, incur, assume, guarantee guaranty or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”), ") any Indebtedness (including any Acquired Debt Indebtedness) and the issuance Borrower shall not issue any Disqualified Stock and shall not permit any of its Subsidiaries to issue any shares of preferred stock; provided, however, that the Borrower may incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if:
(a) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Borrower's most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least (A) from November 26, 1997 to December 31, 1999, 2.25 to 1 and (B) thereafter, 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period; and
(b) the Weighted Average Life to Maturity of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
the remaining Weighted Average Life to Maturity of the Notes, provided that this clause (b) Notwithstanding shall not apply in the foregoing, case of Acquired Indebtedness. The provisions of the Company and, first paragraph of this Section 11.3 shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “"Permitted Debt”Indebtedness"):
(1i) Indebtedness the incurrence by the Borrower and its Subsidiaries of the Company or any Guarantors Existing Indebtedness other than the Notes;
(whether as borrowers or guarantorsii) under one or more Credit Facilities the incurrence by the Borrower of Indebtedness represented by the Notes in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $100,000,000 and the greater Guaranties thereof by the Guarantors existing on the date of this Agreement or required by the terms of the Indenture (xas in effect on the date of this Agreement or as may hereafter be amended, restated, modified or supplemented with the consent of the Bank) $1,000.0 million and (y) to be issued after the sum date of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsthis Agreement;
(2iii) the incurrence by the Borrower of Indebtedness of the Company or any Guarantor created pursuant to and in accordance with Section 11.11, and represented by the Notes (excluding any Additional Notes) and any Guarantee of the Notes, in an aggregate principal amount not to exceed $60,000,000;
(3iv) the incurrence by the Borrower or any of its 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 Company purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Borrower or such Subsidiary, in an aggregate principal amount not to exceed $5,000,000 at any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)time outstanding;
(4v) the incurrence by the Borrower or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by this Agreement to be incurred;
(vi) the incurrence by the Borrower or any of its Subsidiaries of intercompany Indebtedness between or among the Company Borrower and any of its Restricted Wholly Owned Subsidiaries; provided, however, provided that (iA) if the Borrower is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations and (B)
(1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Borrower or a Restricted Wholly Owned Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Borrower or a Restricted Wholly Owned Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5vii) guarantees the incurrence by the Borrower of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into Hedging Obligations in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7viii) the incurrence of Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactionsother than Indebtedness under this Agreement) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit credit, guaranties, performance or surety bonds or other reimbursement obligations, in each case, issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
credit (9other than (A) Indebtedness of the Company advances or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising credit on open account, includible in current liabilities, for goods and services in the ordinary course of businessbusiness and on terms and conditions customary in a Permitted Business and (B) the extension of credit represented by such letter of credit, guaranty, bond or other obligations itself), provided that any draw under or call upon any of the foregoing is repaid in full within 45 days, and provided further that the aggregate amount of all Indebtedness incurred pursuant to this clause (vii) shall not exceed $500,000 at any time outstanding;
(10ix) the incurrence of Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements of the Borrower or a Subsidiary providing for indemnification or indemnification, adjustment of purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock Subsidiary (other than guaranties of a Restricted Subsidiary Indebtedness incurred by any Person acquiring all or a Person thatportion of such business, contemporaneously assets or Subsidiary for the purpose of financing such acquisition), provided that the maximum aggregate liability of all such Indebtedness shall at no time exceed 50% of the gross proceeds actually received by the Borrower or such Subsidiary in connection with such acquisition or disposition, becomes a Restricted Subsidiary;
(12x) Permitted Refinancing the guaranty by the Borrower or any of the Guarantors of Indebtedness of the Company Borrower or any Restricted a Subsidiary issued in exchange for, or of the net proceeds of which are used Borrower that is a Guarantor that was permitted to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, be incurred pursuant to paragraph (a) by another provision of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)11.3;
(13xi) if the Company could incur $1.00 incurrence by Pretzel Time of additional Indebtedness pursuant under a working capital facility, provided that the aggregate principal amount of all Indebtedness (with letters of credit being deemed to paragraph (ahave a principal amount equal to the maximum potential liability of Pretzel Time thereunder) of this Section 4.07 outstanding thereunder after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (x), does not exceed an amount equal to $1,000,000;
(xii) the incurrence by the Borrower of Indebtedness under this Agreement;
(xiii) the incurrence by the Borrower or any of its subsidiaries of Acquired DebtIndebtedness in connection with an Acquisition which is otherwise permitted by Section 11.11 hereof and in an aggregate amount not to exceed $5,000,000 at any time outstanding;
(xiv) the guaranty by the Borrower or any of its Subsidiaries (other than The Mrs. Fields= Brand, Inc.) of operating stor▇ ▇▇▇▇▇ ▇▇▇igations of the Borrower or any of its Subsidiaries or any franchisee of the Borrower or any of its Subsidiaries in the ordinary course of business and consistent with past practice;
(xv) the guaranty by any Subsidiary of the Borrower of Indebtedness of the Borrower under this Agreement or Indebtedness under any other Credit Facility otherwise permitted to be incurred under this Agreement;
(xvi) the incurrence by the Borrower of Indebtedness in the form of notes issued in connection with the repurchase, redemption, acquisition or retirement of Equity Interests of the Borrower or any Subsidiary of the Borrower in an amount not to exceed $500,000 at any time outstanding and subordinated in right of payment to the Obligations; and
(14xvii) the incurrence by the Borrower of Indebtedness or the guaranty by the Borrower of Indebtedness incurred by franchisees in connection with the Company or any Restricted Subsidiary cost of purchasing a franchise and the cost of equipment in addition to connection with the set-up of a franchise, provided that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding or guaranty does not exceed $3,000,000 at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) outstanding. For purposes of determining compliance with this Section 4.0711.3, in the event that an item of Indebtedness meets the criteria of more than one of the types categories of Permitted Indebtedness permitted by described in clauses (i) through (xvi) above or is entitled to be incurred pursuant to the first paragraph of this Section 4.0711.3, the Company Borrower shall, in its sole discretion may, at any timediscretion, classify or, from time to time, reclassify all or any portion of such item of Indebtedness in any manner that complies with this Section 11.3 and only such item of Indebtedness will be required to include the amount of such Indebtedness treated as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have having been incurred pursuant to clause (1) only one of such clauses or pursuant to the first paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) hereof. Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will accreted value shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company11.3.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee guaranty or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “"incur”)" and correlatively, an "incurrence" of) any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not issue any Disqualified Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock), unless such Indebtedness is incurred by Stock if the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Company for the most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding at the time of such incurrence would have been at least 2.00 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, and the application of the proceeds therefrom had occurred at the beginning of such four-quarter period. The foregoing provisions shall not apply to:
(a) the incurrence by the Company (and the Guarantee thereof by the Guarantors) of such Indebtedness taken as one period is at least under the Bank Credit Agreement and the issuance of letters of credit thereunder (with letters of credit being deemed to have a principal amount equal to the aggregate maximum amount then available to be drawn thereunder, assuming compliance with all conditions for drawing) up to an aggregate principal amount of $167.0 million outstanding at any one time, less principal repayments of term loans and permanent commitment reductions with respect to revolving loans and letters of credit under the Bank Credit Agreement (in each case, other than in connection with an amendment, refinancing, refunding, replacement, renewal or greater than 2.25:1.modification) made after the date of this Indenture;
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any Existing Indebtedness;
(c) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Senior Subordinated Notes (but, with respect to this clause (c), only up to the aggregate principal amount thereof issued on the date of this Indenture);
(d) Indebtedness (including Acquired Debt) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal), assets or equipment (whether as borrowers through the direct purchase of assets or guarantors) under one or more Credit Facilities the Capital Stock of any Person owning such assets), in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $1,000.0 15 million and (y) the sum of $650.0 million and 25.0plus 5% of Adjusted Consolidated Net Tangible Assetsthe increase in Total Assets since the date of this Indenture;
(2e) Indebtedness of incurred by the Company or any Guarantor pursuant of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the Notes (excluding any Additional Notes) and any Guarantee ordinary course of the Notes;business, including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; -52- 62
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b);
(4f) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (i) Subsidiaries and Guarantees by the Company of Indebtedness of any subsequent issuance or transfer Restricted Subsidiary of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or by a Restricted Subsidiary thereof and (ii) any sale or other transfer of the Company of Indebtedness of any such Indebtedness to a Person that is not either other Restricted Subsidiary of the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, the Company;
(g) Hedging Obligations that are incurred (1) for the purpose of fixing or hedging interest rate or currency exchange rate risk with respect to constitute an incurrence of such any Indebtedness that is permitted by the Company terms of this Indenture to be outstanding or such Restricted Subsidiary(2) for the purpose of fixing or hedging currency exchange rate risk with respect to any purchases or sales of goods or other transactions or expenditures made or to be made in the ordinary course of business and consistent with past practices as to which the payment therefor or proceeds therefrom, as the case may be, that was not permitted by this clause (4)are denominated in a currency other than U.S. dollars;
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (ah) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% in respect of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts performance and related hedging arrangements entered into in the ordinary course of business, surety bonds and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; completion guarantees provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10i) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of incurrence by the Company or any of its Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters Subsidiaries of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitute, defease, defease or refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant Indebtedness that was permitted by this Indenture to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)be incurred;
(13j) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired DebtCompany; and
(14k) Indebtedness of the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness (including pursuant to the Bank Credit Agreement) not otherwise permitted hereunder in addition an amount under this clause (k) not to that described exceed $25.0 million in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness (or accreted value, as applicable) outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetstime.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (JCS Realty Corp)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”), any Indebtedness (including any Acquired Debt Debt) and the issuance Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that, if no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of this Indebtedness, the Company and the Guarantors may incur Indebtedness (including Acquired Debt) or any Guarantor andissue Disqualified Stock, in each case, if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-ended recent four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence of date on which such Indebtedness taken as one period is incurred or such Disqualified Stock is issued was at least equal to or greater than 2.25:12:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of the Company or any and the Guarantors (whether as borrowers or guarantors) under one or more a Credit Facilities Facility in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed $37.5 million under any term loans made pursuant thereto or under any revolving credit facility or in respect of letters of credit thereunder, minus all principal payments made in respect of any term loans or minus the greater amount by which any commitments thereunder are permanently reduced, in each case, from the proceeds or one of more Asset Sales pursuant to clause (xb)(i) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible AssetsSection 4.11 hereof;
(2) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any including, for the avoidance of doubt, all Additional Notes) and any Guarantee of the Notes (including, for the avoidance of doubt, all Additional Notes);
(3) Indebtedness of the Company or any Restricted Subsidiary Guarantor outstanding on the Issue Datedate of this Indenture, and not otherwise referred to in this Section 4.07(b)definition of “Permitted Debt;”
(4) intercompany Indebtedness between or among the incurrence by the Company and or any of its Restricted SubsidiariesSubsidiaries of Intercompany Debt; provided, however, that that:
(a) if the Company or any Guarantor is the obligor on such Intercompany Debt and the payee is not the Company or a Guarantor, such Intercompany Debt must be expressly subordinated to the prior payment in full in cash of all obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Guarantor; and
(i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness Intercompany Debt being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness Intercompany Debt to a Person that is not either any of the Company, a Guarantor or, in the case where the payor on such Intercompany Debt is not the Company or a Guarantor, any Restricted Subsidiary thereof, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness Intercompany Debt by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees by the Company or any Restricted Subsidiary of any Indebtedness of the Company or any of its Restricted Subsidiaries Subsidiary which is permitted to be incurred under this Indenture; provided that in the case of a guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.12 hereof; provided further that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Note Guarantee, then such Guarantee shall be subordinated in right of payment to the same extent as the Indebtedness guaranteed;
(6) obligations of the Company or any Restricted Subsidiary entered into in the ordinary course of business and not for speculative purposes:
(a) pursuant to Interest Rate Agreements designed to protect the Company or any Restricted Subsidiary against fluctuations in interest rates in respect of Indebtedness of the Company or any Restricted Subsidiary as long as such obligations do not exceed the aggregate principal amount of such Indebtedness then outstanding,
(b) under any Currency Hedging Agreements relating to (1) Indebtedness of the Company or any Restricted Subsidiary that constitutes and/or (a2) obligations pursuant to Interest Rate Agreementspurchase or sell assets or properties, but only to the extent such obligations do notin each case, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into incurred in the ordinary course of business for of the purpose Company or any Restricted Subsidiary; provided, however, that such Currency Hedging Agreements do not increase the Indebtedness or other obligations of mitigating against risks encountered the Company or any Restricted Subsidiary outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder or
(c) under any Commodity Price Protection Agreements which do not increase the amount of Indebtedness or other obligations of the Company or any Restricted Subsidiary outstanding other than as a Permitted Businessresult of fluctuations in commodity prices or by reason of fees, indemnities and compensation payable thereunder;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing financing or refunding refinancing all or any part of the purchase price or cost of acquisition, construction, construction or improvement or development of property (real or personal), plant or equipment used in the business of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (whether through the direct acquisition of such assets or the acquisition of Capital Stock of any Person owning such assets), in an aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not to exceed the greater of (x) $25.0 5.0 million and (y) 1.55.0% of Adjusted Consolidated Net Tangible AssetsAssets outstanding at any time; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in accordance with the definition of such termgood faith, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under in connection with (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business consistent with past practice and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instrumentsinstruments pursuant to self-insurance and workers’ compensation obligations; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrumentinstruments, such obligations are reimbursed within 60 30 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil arising from the honoring by a bank or gas balancing positions arising 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; provided, however, that such Indebtedness is extinguished within three Business Days of incurrence;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article ElevenTwelve;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any of its Restricted Subsidiary Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3) and this clause (11) of this paragraph (b), ;
(12) the incurrence by the Company and (13) any of this Section 4.07(b)its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Company or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(13) the issuance of Disqualified Stock or Preferred Stock by any of the Company’s Restricted Subsidiaries issued to the Company or another Restricted Subsidiary; provided, however, that if the issuer of such shares of Disqualified Stock or Preferred Stock is a Restricted Subsidiary that is not a Guarantor and the purchaser of such shares is the Company could incur $1.00 or a Guarantor, such Investment must be permitted as a Permitted Investment described in clause 1(b) of additional Indebtedness pursuant to paragraph the definition thereof and:
(a) any subsequent issuance or transfer of Capital Stock that results in any such Disqualified Stock or Preferred Stock being held by a Person other than the Company or a Restricted Subsidiary; and
(b) any sale or other transfer of any such Disqualified Stock or Preferred Stock to a Person that is not any of the Company, a Guarantor or, in the case where the issuer of such Disqualified Stock or Preferred Stock is not a Guarantor, any Restricted Subsidiary, will be deemed, in each case, to constitute an issuance of such Disqualified Stock or Preferred Stock by such Restricted Subsidiary that was not permitted by this Section 4.07 after giving effect to such incurrence, Acquired Debtclause (13); and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount amount, or accreted value, as applicable, of all such Indebtedness shall not exceed $7.0 million outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assetsaggregate.
(c) For purposes of determining compliance with this Section 4.07, in Notwithstanding the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07foregoing, the Company will not, and will not permit any of its Restricted Subsidiaries to, incur secured Indebtedness (including Indebtedness under mortgages and Capital Lease Obligations) in its sole discretion may, excess of $82.5 million outstanding at any time, classify or, from one time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Companyaggregate.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Uno of Victor, Inc.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Company shall not and shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or any Guarantor andissue Disqualified Stock, in each case, if the Company’s Consolidated Fixed Charge Coverage Leverage Ratio for at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the same had occurred at the end of the most recently-recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available immediately preceding the incurrence of such Indebtedness taken as one period is at least equal to or available, would have been no greater than 2.25:13.25 to 1.
(b) Notwithstanding The provisions of Section 4.09(a) hereof will not prohibit the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of (A) the Company incurrence by the Issuer or any Guarantors (whether as borrowers or guarantors) under one or more Credit Facilities Guarantor of Priority Lien Debt in an aggregate principal amount at any one time outstanding not to exceed the Priority Lien Cap and (B) the incurrence by the Issuer or any Guarantor of Junior Lien Debt in an aggregate principal amount at any time outstanding not to exceed the Junior Lien Cap;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness and Indebtedness represented by the Exchange Notes issued on the date of the Second Supplemental Indenture pursuant to the Exchange Agreement;
(3) the incurrence by the Issuer or any Guarantor of Parity Lien Debt (which may include without limitation (A) Initial Additional Notes issued under this Indenture following the consummation of the transactions described in the Offering Circular and (B) Exchange Additional Notes issued under this Indenture following the date of the Second Supplemental Indenture) in an aggregate amount incurred pursuant to this clause (13) not to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible AssetsParity Lien Cap;
(24) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, lease financings or purchase money obligations, in each case, incurred for the purpose of financing (whether or not incurred at the time of such purchase, design, construction, installation, integration or improvement) all or any part of the purchase price or cost of design, construction, installation, integration or improvement of property, plant or equipment used in the business of the Company or any Guarantor of its Restricted Subsidiaries, or ownership rights with respect to indefeasible rights of use or minimum investment units (or similar ownership units) in domestic or transnational fiber optic cable or other transmission facilities, and, in each case, including acquisitions by way of acquisitions of the Equity Interests of a Person that becomes a Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the Notes this clause (excluding 4), not to exceed $30.0 million at any Additional Notes) and any Guarantee of the Notestime outstanding;
(35) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the Issue Datenet proceeds of which are used to renew, and not otherwise referred refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to in be incurred under Section 4.09(a) hereof or clauses (2), (4), (5), (14), (15) or (16) of this Section 4.07(b4.09(b);
(46) 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 (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (4);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing, refinancing, renewing, defeasing or refunding all or any part of the purchase price or cost of acquisition, construction, improvement or development of property used in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.:
Appears in 1 contract
Sources: Supplemental Indenture and Amendment to Collateral Agreement (Primus Telecommunications Group Inc)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), other than Permitted Debt, and the issuance of Company shall not issue any Disqualified Stock), unless such Indebtedness is incurred by and shall not permit any of its Restricted Subsidiaries to issue any preferred stock or any Disqualified Stock; provided, however, that the Company or any Guarantor and, in each case, may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any Guarantor may issue preferred stock if the Company’s Consolidated Fixed Charge Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such additional Indebtedness had been incurred, or such Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period. The provisions of the first paragraph of this Section 4.09 shall not apply to the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1) Indebtedness of the incurrence by the Company or any Guarantors (whether as borrowers or guarantors) under Restricted Subsidiary of Indebtedness pursuant to one or more Credit Facilities in an Facilities; provided, however, that, immediately after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding (or accreted value, as applicable) of all Indebtedness incurred under this clause (1) and then outstanding does not to exceed the greater of (xa) $1,000.0 50.0 million and or (yb) the sum of $650.0 million and 25.015.0% of Adjusted Consolidated Net Tangible Total Assets;
(2) Indebtedness of the incurrence by the Company or any Guarantor and the Guarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees to be issued on the Issue Date and the related Exchange Notes and Subsidiary Guarantees to be issued pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the NotesRegistration Rights Agreement;
(3) Indebtedness of the incurrence by the Company or any of its Restricted Subsidiary outstanding on Subsidiaries of Permitted Refinancing Indebtedness, the Issue Datenet proceeds of which are applied to refinance any Indebtedness incurred in respect of any Indebtedness described under clauses (2), and not otherwise referred (3), (5), (6), (8), (12), (13) or (14) of this paragraph or incurred pursuant to in the first paragraph of this Section 4.07(b)4.09;
(4) 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 (iA) if the Company or any Guarantor is the obligor and a Restricted Subsidiary of the Company that is not a Guarantor is the obligee on such Indebtedness, such Indebtedness will be subordinated to the payment in full of all Obligations with respect to the Notes and the Subsidiary Guarantees, as the case may be, and (B) (1) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was is not then permitted by this clause (4);
(5) guarantees the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations (including any Acquired Debt), in each case, incurred in connection with the purchase of, or for the purpose of financing the purchase of, the cost of construction, improvement or development of, property, plant or equipment used in the Permitted Business of the Company or a Restricted Subsidiary of the Company 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 (5), not to exceed $10.0 million as of any date incurrence;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Existing Indebtedness;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries which is permitted to be providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred under this Indenture;
(6) Indebtedness in connection with the disposition or acquisition of any business or assets of the Company or any of its Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate AgreementsSubsidiaries, but only to the extent other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness or assets of the Company or any of its Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case incurred Subsidiaries for the purpose purposes of financingfinancing such acquisition; provided, refinancinghowever, renewing, defeasing or refunding all or any part of that (A) such Indebtedness is not reflected on the purchase price or cost of acquisition, construction, improvement or development of property used in the business balance sheet of the Company or any of its Subsidiaries; provided that Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the aggregate principal amount balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)) and (B) the maximum liability in respect of all such Indebtedness incurred in connection with a disposition shall at no time exceed the gross proceeds including noncash proceeds (the Fair Market Value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(9) the guarantee by the Company or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by or for the account of the Company or a Restricted Subsidiary in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of the Company or that was permitted to be incurred by any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) provision of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b)4.09;
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) For purposes of determining compliance with this Section 4.07, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section 4.07, the Company in its sole discretion may, at any time, classify or, from time to time, reclassify all or any portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of this Section 4.07 rather than paragraph (a) of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur” or an “incurrence”), ) any Indebtedness (including including, without limitation, any Acquired Debt Indebtedness) and that the issuance Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock or Disqualified Stock); provided, unless such Indebtedness is incurred by however, that the Company or any Guarantor andmay incur Indebtedness or issue Disqualified Stock, and any Restricted Subsidiary may incur Acquired Indebtedness, in each case, case if the Company’s Consolidated Fixed Charge Interest Coverage Ratio for the Company’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the incurrence date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 3.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness or Disqualified Stock had been issued or incurred, as the case may be, at the beginning of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, four-quarter period. The foregoing provisions shall not apply to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all of the following (collectively, the “Permitted Debt”):
(1) Indebtedness of incurrence by the Company or any Guarantors of its Restricted Subsidiaries of any of the following Indebtedness:
(whether as borrowers or guarantorsa) under one or more Credit Facilities Indebtedness in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed at any time outstanding the greater of of: (x) $1,000.0 million 200,000,000, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness, and less any amounts derived from Asset Sales and applied to the permanent reduction of Indebtedness in accordance with Section 4.10 hereof and (y) an amount that does not cause the sum First Lien Leverage Ratio of $650.0 million and 25.0% the Company to exceed 2.75 to 1.00 determined on a pro forma basis (including the pro forma application of Adjusted Consolidated Net Tangible Assetsthe net proceeds therefrom);
(2b) Indebtedness of the Company or any Guarantor pursuant to the Notes (excluding any Additional Notes) and any Guarantee of the First Lien Notes;
(3c) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Hedging Obligations;
(4d) Indebtedness represented by the Original Notes, or the Subsidiary Guarantees with respect to the Original Notes, and any Additional Notes issued in respect to any of the foregoing (including as PIK Interest thereon) in accordance with the terms hereof;
(e) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that (i1) if the Company or any Guarantor is the obligor on such Indebtedness but the lender is not the Company or a Guarantor, then the Indebtedness must be unsecured and expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as the case may be, and (2) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) of the Company, or any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, as of the date of such issuance, sale or other transfer that was is not permitted by this clause (4e);
(5) guarantees of any Indebtedness of the Company or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6f) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into thereof in the ordinary course of business, and (c) including guarantees or obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(g) Indebtedness represented by Capital Lease Obligations Obligations, mortgage financings or purchase money obligations (whether or not incurred pursuant to sale and leaseback transactions) any guarantee thereof or Purchase Money Obligations or other Indebtedness incurred or assumed in connection indemnity with the acquisitionrespect thereto), construction, improvement or development of real or personal, movable or immovable, property in each case case, incurred for the purpose of financing, refinancing, renewing, defeasing or refunding financing all or any part of the purchase price or cost of acquisitionconstruction or improvement of property, construction, improvement plant or development of property equipment used in the business of the Company or any of its Restricted Subsidiaries; provided that the , in an aggregate principal amount amount, including all Permitted Refinancing Indebtedness incurred by the Company to refund, refinance or replace any Restricted Subsidiary Indebtedness incurred pursuant to this clause (7) outstanding g), not to exceed at any time shall not exceed the greater of (x) outstanding $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the definition of such term, of the acquired or constructed asset or improvement so financed25,000,000;
(8) h) the guarantee by the Company of Indebtedness of any of its Restricted Subsidiaries or by any Restricted Subsidiary of Indebtedness of the Company or any another Restricted Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.09; provided that if the Indebtedness being guaranteed is subordinated in right of payment to the Notes or a Subsidiary under Guarantee then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(ai) one intercompany Indebtedness between or more standby letters of credit issued by or for the account of among the Company or a and any of its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, further, that with respect to clauses (a) and (b), such Indebtedness is not in connection with the borrowing of money cash pooling or the obtaining of advances or creditother cash management arrangements;
(9) Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Indebtedness of the Company to the extent the net proceeds thereof are promptly deposited to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12j) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued incurred in exchange for, or the net proceeds of which are used to extend, refinance, renew, extendreplace, substitutedefease or refund Indebtedness incurred pursuant to the first paragraph and clauses (b), defease, (d) and (j) of the second paragraph of this Section 4.09;
(k) Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) in an aggregate principal amount not to exceed 2% of the Company’s Consolidated Total Assets minus the sum of all Indebtedness of Restricted Subsidiaries of the Company (other than Guarantors) then outstanding;
(l) any additional Indebtedness of the Company or any Guarantor in an aggregate principal amount not in excess of $25,000,000 at any one time outstanding and any guarantee thereof;
(m) any Indebtedness (i) arising under any local working capital facilities or (ii) to finance the acquisition of streamers and/or other marine equipment (together with any Permitted Refinancing Indebtedness incurred to refund, refinance or replace, replace any Indebtedness, including any Disqualified Stock, Indebtedness incurred pursuant to paragraph this clause (a) of this Section 4.07 and clauses (2m)), (3)collectively, (12) and (13) of this Section 4.07(b)in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(13n) if Acquired Indebtedness of a Subsidiary of the Company acquired after the Issue Date or a person merged into or consolidated with any member the Company or a Restricted Subsidiary after the Issue Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Indenture; provided that after giving pro forma effect to the relevant transaction (including the incurrence of Indebtedness hereunder) (A) no Default or Event of Default shall have occurred and be continuing and (B) the Company could incur $1.00 of additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth in the first paragraph (a) of this Section 4.07 after 4.09 or the Consolidated Interest Coverage Ratio would not be less than it was immediately prior to giving effect to such incurrenceacquisition or other transaction;
(o) Indebtedness arising under the French Revolving Facility Agreement in a maximum principal amount not to exceed the Termed Out Amount;
(p) unsecured Indebtedness in respect of the Accrued Senior Note Interest in a maximum amount not to exceed the SN Interest Termed Out Amount;
(q) other than Indebtedness incurred pursuant to clauses (a), Acquired Debt(b), (d), (o) or (p) of the second paragraph of this Section 4.09, Indebtedness incurred in connection with the Permitted Closing Steps; and
(14r) a Capital Lease Obligation in connection with a Galileo Transaction; provided that if the Company or any Guarantor is an obligor with respect to any unsecured Indebtedness incurred under Credit Facilities pursuant to clauses (a), (l), (m)(i) or (n) of the second paragraph of this Section 4.09, then such Indebtedness must be expressly subordinated in right of payment to all of the Company’s obligations with respect to the Notes or such Guarantor’s obligations under its Subsidiary Guarantee, as applicable. The Company shall not, and shall 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 subordinated to any other Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such IndebtednessGuarantor, so long as the aggregate principal amount of all case may be, unless such Indebtedness outstanding at is also by its terms (or by the terms of any one time agreement governing such Indebtedness) made expressly subordinate to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may be, to the same extent and in the aggregate same manner as such Indebtedness is subordinated pursuant to subordination provisions that are most favorable to the holders of any other Indebtedness of the Company or of such Guarantor, as the case may be; provided, however, that no Indebtedness shall not exceed the greater be deemed to be contractually subordinated in right of (x) $50.0 million and (y) 3.0% payment to any other Indebtedness solely by virtue of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Indebtedness permitted by described in clauses (a) through (l) of the second paragraph, or is entitled to be incurred pursuant to the first paragraph, of this Section 4.074.09, the Company in shall be permitted to classify such item of Indebtedness on the date of its sole discretion mayincurrence, at any time, classify or, from time to time, or later reclassify all or any a portion of such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) 4.09. The reclassification as Indebtedness of this Section 4.07.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference operating leases due to one provision permitting such Indebtedness but may be permitted a change in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock accounting principles will not be deemed to be an incurrence of Indebtedness for the purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company4.09.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (CGG Marine B.V.)
Incurrence of Indebtedness and Issuance of Disqualified Stock. (a) The Company will Partnership shall not, and will shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incurliable, contingently or otherwise otherwise, with respect to (collectively, “incur”), ) any Indebtedness (including any Acquired Debt Debt), and the issuance Partnership shall not issue any Disqualified Stock and the Partnership will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of this Indebtedness, the Partnership may incur Indebtedness (including Acquired Debt) or the Partnership may issue shares of Disqualified Stock), unless such Indebtedness is incurred by if (x) the Company or any Guarantor and, in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the Partnership’s most recently-recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which that additional Indebtedness is incurred, would have been at least 2.0 to 1, determined on a pro-forma basis (including a pro-forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of the four-quarter period and (y) no Default or Event of Default shall have occurred and be continuing at the time of or would occur after giving pro forma effect to such incurrence or issuance and the application of proceeds therefrom. The first paragraph of this Section 4.09 shall not prohibit the incurrence of such Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the foregoing, the Company and, to the extent specifically set forth below, the Restricted Subsidiaries may incur each and all any of the following (collectively, the “Permitted Debt”):
(1a) Indebtedness represented by the Notes to be issued on the date of this Indenture and the Exchange Notes to be issued pursuant to the Registration Rights Agreement, and (b) the respective obligations of the Company or any Guarantors (whether as borrowers or guarantors) Partnership and its Restricted Subsidiaries arising under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not the Collateral Documents to exceed the greater of (x) $1,000.0 million and (y) the sum of $650.0 million and 25.0% of Adjusted Consolidated Net Tangible Assetsextent such obligations would represent Indebtedness;
(2) Indebtedness of the Company or any Guarantor incurred pursuant to the Notes (excluding New Revolving Facility in an amount outstanding at any Additional Notes) and time not to exceed $20 million less any Guarantee of the Notespermanent reductions made pursuant to Section 4.10 hereof;
(3) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, and not otherwise referred to in this Section 4.07(b)Existing Indebtedness;
(4) Permitted Refinancing Indebtedness;
(5) so long as at the time of incurrence no Event of Default has occurred and is continuing, Indebtedness in one or more FF&E Financings and Capitalized Lease Obligations to acquire or refinance furniture, fixtures or equipment incident to and useful in the Gaming Business, in an aggregate principal amount not to exceed $5.0 million outstanding at any time;
(6) intercompany Indebtedness between or among the Company Partnership and any of its Restricted SubsidiariesSubsidiaries as provided in Section 4.20 hereof; provided, however, that that:
(i) if the Partnership or any Subsidiary Guarantor is the obligor on that Indebtedness, the obligation to pay principal, interest or other amounts under such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Partnership, or the Subsidiary Guarantee, in the case of a Subsidiary Guarantor; and
(ii) (A) any subsequent issuance or transfer of Capital Stock Equity Interests that results in any such Indebtedness being held by a Person other than the Company Partnership or a Restricted Subsidiary thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either other than the Company Partnership or a Restricted Subsidiary thereofSubsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such the Restricted Subsidiary, as the case may be, that was not permitted by this clause (46);
(57) guarantees of any Indebtedness Hedging Obligations of the Company Partnership or any of its Restricted Subsidiaries which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that constitutes (a) obligations pursuant to Interest Rate Agreements, but only to the extent such obligations do not, on a net basis, exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Agreements; (b) obligations under currency exchange contracts and related hedging arrangements entered into in the ordinary course of business, and (c) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of mitigating against risks encountered in a Permitted Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to sale and leaseback transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition, construction, improvement or development of real or personal, movable or immovable, property in each case are incurred for the purpose of financingfixing, refinancingmanaging or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; provided, renewinghowever, defeasing or refunding all or any part of that, in each case, the purchase price or cost of acquisition, construction, improvement or development of property used Hedging Obligations are not incurred for speculative purposes;
(8) to the extent that such incurrence does not result in the business of the Company or its Subsidiaries; provided that the aggregate principal amount incurred incurrence by the Company Partnership or any Restricted Subsidiary pursuant to this clause (7) outstanding at any time shall not exceed the greater of (x) $25.0 million and (y) 1.5% of Adjusted Consolidated Net Tangible Assets; provided further that the principal amount of any obligation for the payment of borrowed money of others, Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, incurred solely as determined in accordance with the definition of such term, a result of the acquired execution by the Partnership or constructed asset or improvement so financed;
(8) Indebtedness its Restricted Subsidiaries of the Company or any Restricted Subsidiary under (a) one or more standby letters of credit issued by relating to workers compensation or for the account of the Company or a Restricted Subsidiary in the ordinary course of business self insurance, performance and (b) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees surety bonds or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 60 days following such drawing; provided, furtherhowever, that with respect the foregoing exception shall not be applicable to clauses (a) and (b), such Indebtedness is not incurred in connection with the borrowing performance by the Partnership or its Restricted Subsidiaries of money such bonds or the obtaining instruments or payment of advances or such letter of credit;; and
(9) the Indebtedness represented by a Subsidiary Guarantee. The Partnership shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary with respect Partnership unless such Indebtedness is also contractually subordinated in right of payment to obligations relating to oil or gas balancing positions arising in the ordinary course of business;
(10) Notes on substantially identical terms; provided, however, that no Indebtedness of the Company Partnership shall be deemed to the extent the net proceeds thereof are promptly deposited be contractually subordinated in right of payment to defease or satisfy the Notes pursuant to Article Eight or Article Eleven;
(11) any other Indebtedness of the Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, earn-outs or other similar obligations or from guarantees or letters Partnership solely by virtue of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary or a Person that, contemporaneously with such acquisition or disposition, becomes a Restricted Subsidiary;
(12) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to paragraph (a) of this Section 4.07 and clauses (2), (3), (12) and (13) of this Section 4.07(b);
(13) if the Company could incur $1.00 of additional Indebtedness pursuant to paragraph (a) of this Section 4.07 after giving effect to such incurrence, Acquired Debt; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness outstanding at any one time in the aggregate shall not exceed the greater of (x) $50.0 million and (y) 3.0% of Adjusted Consolidated Net Tangible Assets.
(c) being unsecured. For purposes of determining compliance with this Section 4.074.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the types categories of Permitted Debt described in clauses (1) through (9) above, or is entitled to be incurred under the first paragraph of this Section 4.09, the Partnership shall be permitted to classify the item of Indebtedness permitted by this Section 4.07on the date of its incurrence, the Company in its sole discretion may, at any time, classify or, from time to time, or later reclassify all or any a portion of such the item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided Indebtedness, in any manner that Indebtedness under a Credit Facility which was incurred on or prior to, and outstanding on (after giving effect to the application of proceeds of Notes), the Issue Date, and any renewals, extensions, substitutions, refundings, refinancings or replacements thereof, shall be deemed to have been incurred pursuant to clause (1) of paragraph (b) of complies with this Section 4.07 rather than paragraph (a) of this Section 4.074.09.
(d) Indebtedness permitted by this Section 4.07 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.07 permitting such Indebtedness.
(e) Accrual of interest, accretion or amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.07; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred pursuant to such Indebtedness and such letter of credit shall be equal to the greater of (x) the principal of the Indebtedness so secured by such letter of credit and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the amount of the liability thereof shall be determined in accordance with GAAP.
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Sources: Indenture (Eldorado Resorts LLC)