Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s most 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 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million. (b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions; (2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness; (3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees; (4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer; (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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b); (6) 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: (a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); (7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16; (9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued; (10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10); (11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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; (12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that: (a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and (b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition; (13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13); (14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business; (15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million; (16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million; (17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1); (18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction; (19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business; (20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5); (21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and (22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 3 contracts
Sources: Indenture (Nortek Inc), Indenture (Mammoth-Webco, Inc.), Indenture (Aigis Mechtronics, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 700.0 million and (yii) the amount $175.0 million plus 35.0% of the Borrowing Base as of Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 45.0 million or and (yii) 33.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (1514) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of self-Recourse Debt; providedinsurance obligations or bid, howeverplugging and abandonment, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiaryappeal, such event shall be deemed to constitute an incurrence of Indebtedness reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred Subsidiary in a transaction permitted by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionthis Indenture; provided that:
(a) that such Indebtedness obligation is not reflected as a liability on the face of the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;Permitted Acquisition Indebtedness; and
(15) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million;
million and (16ii) the incurrence by the Foreign Restricted Subsidiaries 5.0% of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability Company’s Adjusted Consolidated Net Tangible Assets determined as of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment date of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessissuance. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2215) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien 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 payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to have been incurred the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date such of determination; and
(2) the amount of the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)of the other Person.
Appears in 3 contracts
Sources: Indenture (Parsley Energy, Inc.), Indenture (Parsley Energy, Inc.), Indenture (Parsley Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Following the Non-Cash Pay Period, the Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 150.0 million and (yii) the amount of secured Indebtedness that could be incurred such that giving effect to such incurrence the Borrowing Base as of Consolidated Secured Leverage Ratio would be no greater than 2.0 to 1.0; for the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsmost recent four-quarter period for which financial information is available;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, project financings or purchase money obligationsobligations (including without limitation all or any part of the purchase price or cost of transportation assets including trucks, trailers and rail cars, used in the business of the Company or any of its Restricted Subsidiaries); and, in each case, incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any one time outstanding, the greater of (xi) $30.0 50.0 million or and (yii) 310% of Consolidated Tangible Assets of the IssuerCompany’s Total Assets;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposesincluding under Credit Facilities), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat 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;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or another Restricted Subsidiary (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of or was otherwise acquired by the Company or another Restricted Subsidiary); provided that the Company or such Restricted Subsidiary would have been able to incur such Indebtedness at the time of such acquisition pursuant to Section 4.09(a) hereof;
(13) 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 assets or property or Capital Stock of a Restricted Subsidiary, and not exceeding the Fair Market Value of the consideration received by the Company or any Restricted Subsidiary in respect thereof;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by letters of credit (or guarantees thereof) entered into in the ordinary course of business to the extent that such letters of credit are (a) fully cash collateralized in an aggregate amount not to exceed $3.0 million or (b) not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following a demand for reimbursement following payment on the letter of credit; provided that such letters of credit shall not constitute Permitted Debt pursuant to this clause (14) if they are issued in support of Indebtedness;
(15) any earn-out or similar provision existing at the date of this Indenture or in connection with any Permitted Investment or Asset Sale; and
(16) 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 one 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 $35.0 million. The Company will not incur, and will not permit any 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 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 Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the case event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. Indebtedness permitted by this 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 4.09 permitting such Indebtedness. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until incurred; provided that if such Indebtedness is actually repaidincurred to refinance other Indebtedness denominated in a foreign currency, notwithstanding any provisions under any Credit Facility that provide that 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 is being refinanced. 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 borrowedexceeded 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, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 3 contracts
Sources: Indenture (Nuverra Environmental Solutions, Inc.), Indenture (Nuverra Environmental Solutions, Inc.), Indenture (Nuverra Environmental Solutions, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the Issuer’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 1, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.08(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or and any Guarantor of Indebtedness and letters of credit under any Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 10.0 million and (yii) the maximum aggregate principal amount (or accreted value, as applicable) of the Borrowing Base Priority Lien Debt that, as of the date of such incurrenceincurrence and after giving pro forma effect to the application of the net proceeds therefrom, less, in can be incurred without the case Priority Secured Leverage Ratio exceeding 0.40 to 1.00 (the greater of both clause (xi) and clause (yii), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y“Priority Lien Cap”), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance of Disqualified Stock or Preferred Stock represented by by, as applicable, Capital Lease Obligations, mortgage financings or financings, purchase money obligationsobligations or letters of credit, in each case, (x) incurred or issued for the purpose of financing financing, whether or not incurred at the time of such cost or acquisition, all or any part of the purchase price, price or cost of construction design, construction, lease, installation or improvement, improvement of property (real or personal), plant personal property used or equipment used useful in the business of the Issuer or any of its Restricted Subsidiaries, whether through or (y) with respect to assets that are acquired by the direct purchase Issuer or any of assets its Restricted Subsidiaries in connection with the acquisition of restaurants, including from any of the Issuer’s or the Capital its Restricted Subsidiaries’ franchisees; provided that Indebtedness incurred or Disqualified Stock of any Person owning such assets, in an aggregate principal amountor Preferred Stock issued pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (but not Disqualified Stock or Preferred Stock) incurred pursuant to this clause (4), shall not to exceed, at any time outstanding, exceed (i) the greater of (xA) $30.0 2.5 million or and (yB) 310.0% of Consolidated Total Tangible Assets (as determined at the time of incurrence of such Indebtedness or issuance of such Disqualified Stock of Preferred Stock) plus (ii) the amount of such Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations of the Issuertype contemplated by this clause (4) that constitute Existing Indebtedness on the Issue Date that are permanently repaid, discharged or terminated (but not with the proceeds of Permitted Refinancing Indebtedness) subsequent to the Issue Date, at any one time outstanding;
(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 renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under the Fixed Charge Coverage Ratio test set forth in Section 4.10(a4.08(a) hereof or clauses (2), (3), (4) (with respect to Indebtedness only, and not with respect to Disqualified Stock or Preferred Stock), this clause (5), or clauses (1516), (17) or (1621) of this Section 4.10(b4.08(b);
(6) 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:
(aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the 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 the 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 Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer 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 Issuer or a Restricted Subsidiary of the Issuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, will be deemed, in each case, to constitute an issuance of such Preferred Stock by such Restricted Subsidiary not permitted by this clause (7);
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not entered into for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.08; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee shall be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with in respect to letters of credit issued bid, performance and surety bonds in the ordinary course of business, including, without limitation, letters of credit business (in respect of workers’ compensation claims or self-insurance, or each case other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrencethan for an obligation for money borrowed);
(1211) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price price, or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, Subsidiary (other than Guarantees 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; provided that:
(a) ), so long as the principal amount of such Indebtedness is does not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that or any of its Restricted Subsidiary Subsidiaries in connection with such transaction;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of: (a) unpaid insurance premiums owed to any Person providing property, casualty, liability or other insurance to the Issuer or any of its Subsidiaries in any fiscal year, provided that dispositionsuch Indebtedness is incurred only to defer the cost of such unpaid insurance premiums for such fiscal year and is outstanding only during such fiscal year; (b) workers’ compensation claims, self-insurance obligations, performance, indemnity, surety, judgment, appeal, advance payment, customs, value added or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warranties provided by the Issuer or any of its Restricted Subsidiaries or relating to liabilities, obligations or guarantees Incurred in the ordinary course of business; (c) customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased in the ordinary course of business; (d) letters of credit (provided that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days of such drawing), bankers’ acceptance, guarantees or other similar instruments or obligations issued or relating to liabilities or obligations incurred in the ordinary course of business; and (e) any customary cash management, cash pooling or netting or setting off arrangements in the ordinary course of business (in the case of each of (a)-(e), other than for an obligation for borrowed money);
(13) the issuance of Disqualified Stock or preferred stock incurrence by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another any of its Restricted SubsidiarySubsidiaries of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in if such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof instrument is honored and (ii) any sale or other transfer of any drawn against insufficient funds, then such shares of Disqualified Stock or preferred stock to a Person that Indebtedness is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)covered within 10 Business Days;
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect Indebtedness representing deferred compensation to employees of performance and surety bonds and completion Guarantees provided by the Issuer or such any of its Restricted Subsidiary Subsidiaries in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of Indebtedness owed to any current or former officer, director or employee of the Issuer or any of its Restricted Subsidiaries to finance the repurchase, redemption or other acquisition or retirement of Equity Interests held by current or former officer, director of employee to the extent such repurchase, redemption, acquisition or retirement is permitted pursuant to clause (5) of the definition of “Permitted Payments”; provided that such Indebtedness must be contractually subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes and the Note Guarantees;
(16) Indebtedness (including Acquired Debt) of (x) the Issuer or any Guarantor incurred or issued to finance an acquisition of all or substantially of the assets of another Person (whether through merger, consolidation, the direct purchase of such assets or the acquisition of the Capital Stock of the Person owning such assets) or (y) Persons that are acquired by the Issuer or any Guarantor or merged into or consolidated with the Issuer or a Guarantor; provided that either: (a) the aggregate principal amount of all such Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16)(a), does not exceed $5.0 million at any time outstanding or (b) after giving effect to the incurrence of such Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16)(b), and such acquisition, merger or consolidation (in each case with such pro forma adjustments as are contemplated by the definition of “Fixed Charge Coverage Ratio”), either:
(A) 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 the first paragraph of this covenant, or
(B) the Fixed Charge Coverage Ratio of the Issuer would not be lower than immediately prior to such acquisition, merger or consolidation;
(17) the incurrence by the Issuer or any of its Restricted Subsidiaries of 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1517), not to exceed $75.0 million;
(16) 100% of the incurrence Net Proceeds received by the Foreign Issuer from the issuance or sale (other than to a Restricted Subsidiaries Subsidiary of the Issuer Issuer) of Indebtedness in its Capital Stock (other than Disqualified Stock or an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal Excluded Contribution) or otherwise contributed to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary equity capital of the Issuer (other than Standard Securitization Undertakings) incurred through the issuance of Disqualified Stock or an Excluded Contribution), in connection with a Qualified Receivables Transactioneach case, subsequent to the Issue Date; provided, thathowever, that any such Net Proceeds that are so received or contributed shall not increase the aggregate amount of available for making Restricted Payments to the extent the Issuer and its Restricted Subsidiaries incur Indebtedness under in reliance thereon pursuant to this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of its Restricted Subsidiary Subsidiaries of Indebtedness to the extent the proceeds of such Indebtedness are deposited to defease or merged into discharge the Issuer or Restricted Subsidiary in accordance with the terms of Notes and this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transactionIndenture as described under Articles 8 and 12 hereof;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the a Credit Agreement Facility incurred pursuant to Section 4.08(b)(1) hereof, in a principal amount not in excess of the stated amount of such letter of credit;
(20) the write-up of Indebtedness in accordance with purchase accounting or fair value accounting; and
(2221) contingent liabilities arising out the incurrence by the Issuer or any of endorsements its Restricted Subsidiaries of checks additional Indebtedness and the issuance of Disqualified Stock and Preferred Stock 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 (but not Disqualified Stock or Preferred Stock) incurred pursuant to this clause (21), not to exceed $5.0 million. The Issuer will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other negotiable instruments for deposit Indebtedness of the Issuer or collection such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the Note Guarantee of such Guarantor on substantially identical terms; provided, however, that this Indenture will not treat (1) unsecured Indebtedness as subordinated or junior to secured Indebtedness merely because it is unsecured or (2) secured Indebtedness as subordinated or junior to any other secured Indebtedness merely because it has a junior priority with respect to the same collateral or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements, collateral trust agreements or other arrangements giving one or more of such holders priority over the other holders in the ordinary course of businesscollateral held by them. For purposes of determining compliance with this Section 4.104.08, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Sections 4.08(b)(1) through (224.08(b)(21) abovehereof, or is entitled to be incurred pursuant to Section 4.10(a)4.08(a) hereof, the Issuer will be permitted permitted, in its sole discretion, to divide or classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later divide, classify or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at 4.08 and such time. item of Indebtedness under the Credit Agreement on date of this Indenture shall will be deemed to have treated as having been incurred on pursuant to one or more such date clauses or pursuant to Section 4.10(b)(1)4.08(a) hereof. Any Indebtedness incurred under Credit Facilities pursuant to clause (1) The accrual of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).intere
Appears in 2 contracts
Sources: Indenture (Nathans Famous Inc), Indenture (Nathans Famous Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee enter into any guarantee of, or otherwise become directly or indirectly liable, contingently or otherwise, with respect to for (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the any Restricted Subsidiaries Subsidiary may issue preferred stock, Preferred Stock if the Fixed Charge Coverage Ratio for the Issuer’s most 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 Preferred Stock or preferred stock is issued would have been at least 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Coverage Ratio Exception”), as if the additional Indebtedness had been incurred Disqualified or the Preferred Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, however, provided further that the aggregate principal amount of Indebtedness or Disqualified that may be incurred and the liquidation preference of Preferred Stock that may be incurred under this paragraph issued pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million100.0 million at any one time outstanding.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness under the Notes and one or more Credit Agreements together with the incurrence by of the Issuer or any Guarantor of Indebtedness under Credit Facilities (guarantees thereunder and the incurrence by the Guarantors issuance and creation of Guarantees thereof) in an aggregate principal amount at any one time outstanding letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the maximum potential liability of the Issuer face amount thereof) and the Guarantors thereunderother Indebtedness, up to an aggregate principal amount, together with amounts outstanding under a Qualified Securitization Financing incurred pursuant to clause (17) below, not to exceed at any one time outstanding the greater of (xA) $385.0 1,550.0 million and (yB) the maximum aggregate principal amount of the Borrowing Base (as of the date of incurrence of any such incurrenceIndebtedness and after giving pro forma effect to the incurrence thereof and the application of the net proceeds therefrom (or as of the date of the initial borrowing of such Indebtedness after giving pro forma effect to the incurrence of the entire committed amount of such Indebtedness)) that can be incurred without exceeding a Senior Secured Indebtedness to EBITDA Ratio for the Issuer of 3.50 to 1.00 (it being understood that for purposes of determining compliance under this clause (1), lessany Indebtedness incurred under this clause (1) (whether or not secured), other than Revolving Credit Agreement Indebtedness, will be included in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds Senior Secured Indebtedness for purposes of Asset Sales, applied by calculating the Issuer or any Guarantor Senior Secured Indebtedness to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (yEBITDA Ratio), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness[reserved];
(3) the incurrence by the Issuer Existing Unsecured Notes and its Restricted Subsidiaries of other Existing Indebtedness represented by the Notes to be issued on the date of this Indenture (other than Indebtedness described in Sections 4.10(b)(1) and related Note Guarantees(7));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented Subsidiary and Preferred Stock issued by Capital Lease Obligationsa Restricted Subsidiary to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment that is used or useful in the business of the Issuer or any of its Restricted Subsidiaries, a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, ) in an aggregate principal amountamount that, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness and/or Preferred Stock then outstanding and incurred to refund, refinance or replace any Indebtedness incurred issued pursuant to this clause (4), does not to exceed, at any time outstanding, exceed the greater of (x) $30.0 50.0 million or and (y) 35.0% of Consolidated Tangible Assets of the IssuerAssets;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, including without limitation, limitation letters of credit in respect of workers’ compensation claims claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims claims, health, disability or self-other employee benefits or property casualty or liability insurance or self insurance; provided, however, that, provided 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;
(126) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees 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; provided that:
(a) that such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that such balance sheet for purposes of this clause (aclause)); and;
(b7) Indebtedness of the maximum assumable liability in respect Issuer owed to and held by any Restricted Subsidiary or Indebtedness of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received a Restricted Subsidiary owed to and without giving effect to any subsequent changes in value) actually received held by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided provided, however, that (iA) any subsequent issuance or transfer of any Equity Securities Capital Stock or any other event that results in any such Disqualified Stock Restricted Subsidiary ceasing to be a Restricted Subsidiary or preferred stock being held by a Person other than any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary thereof and (iiSubsidiary) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the issuer thereof and (B) if the Issuer is the obligor on such Indebtedness (other than any Existing Indebtedness) owing to a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of the Issuer with respect to the Notes;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or a Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Preferred Stock;
(149) Hedging Obligations of the incurrence Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting (A) interest rate risk with respect to any Indebtedness that is permitted to be incurred by the terms of this Indenture, (B) exchange rate risk with respect to any currency exchange or (C) commodity price risk;
(10) obligations in respect of self insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries of Subsidiary or obligations in respect of performance letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(11) Indebtedness of the Issuer or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and surety bonds liquidation preference of all other Indebtedness and completion Guarantees provided by Preferred Stock then outstanding and incurred pursuant to this clause (11), does not at any one time outstanding exceed the greater of $250.0 million and 17.5% of Consolidated Tangible Assets (it being understood that any Indebtedness or Preferred Stock incurred pursuant to this clause (11) shall cease to be deemed incurred or outstanding for purposes of this clause (11) but shall be deemed incurred for the purposes of Section 4.10(a) from and after the first date on which the Issuer or such Restricted Subsidiary in the ordinary course of businesscould have incurred such Indebtedness or Preferred Stock under Section 4.10(a) without reliance on this clause (11));
(15a) the incurrence any guarantee by the Issuer or any Guarantor a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as (in an aggregate principal amount (or accreted value, as applicable) at the case of any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17such Indebtedness) the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness or other obligations of the Issuer; provided that (in the case of any such guarantee of Indebtedness) such guarantee is incurred in accordance with Section 4.16;
(13) Indebtedness or Preferred Stock of the Issuer or any Restricted Subsidiary that serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred as permitted by Section 4.10(a) and Section 4.10(b)(3), (4), (13) and (14) or any Indebtedness issued to so extend, replace, refund, refinance, renew or defease such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”); provided that such Refinancing Indebtedness (A) has a Receivables Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, (B) to the extent such Refinancing Indebtedness refinances Indebtedness that is subordinated to the Notes, such Refinancing Indebtedness is subordinated to the Notes at least to the same extent as the Indebtedness being refinanced or refunded, (C) shall not include (x) Indebtedness or Preferred Stock of a Subsidiary that is not recourse to a Guarantor that refinances Indebtedness or Preferred Stock of the Issuer or any other Restricted Subsidiary (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (other than Standard Securitization UndertakingsD) incurred shall not be in connection a principal amount (or, if issued with original issue discount, an aggregate issue price) in excess of the principal amount of, premium, if any, and accrued interest on, the Indebtedness being replaced, refunded, refinanced, renewed or defeased plus any fees, premiums, underwriting discounts, costs and expenses relating to such extension, replacement, refunding, refinancing, renewal or defeasance, and (E) shall not have a Qualified Receivables Transaction; Stated Maturity date prior to the Stated Maturity of the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased and provided, thatfurther, the aggregate amount that subclauses (A), (B) and (E) of Indebtedness under this clause (17), when aggregated with all 13) will not apply to any refunding or refinancing of any Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1)any Credit Agreement;
(1814) the incurrence Indebtedness or Preferred Stock of Indebtedness (xA) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition of any assets (including Capital Stock), business or Person or (yB) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged or consolidated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transactionacquisition, merger or consolidation (including the incurrence and/or repayment of such Indebtedness) either (x) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception or retirement of any Indebtedness, (y) the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transactionacquisition, merger or consolidation;
(1915) contingent liabilities Indebtedness arising out from the honoring by a bank or financial institution of endorsements of checks and other negotiable instruments for deposit a check, draft or collection similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(2016) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to the any Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and;
(17) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Securitization Subsidiary (except for Standard Securitization Undertakings);
(18) (A) Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product Financing Indebtedness;
(19) Contribution Indebtedness;
(20) Indebtedness of Foreign Subsidiaries of the Issuer, provided, however, that the aggregate principal amount of Indebtedness incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (20), does not exceed the greater of (x) $100.0 million and (y) 9.0% of the Consolidated Tangible Assets;
(21) Indebtedness consisting of promissory notes issued by the Issuer or any of its Restricted Subsidiaries to future, current or former employees, directors and consultants, and their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests permitted by Section 4.11;
(22) contingent liabilities arising out Indebtedness of endorsements the Issuer or any of checks and other negotiable instruments for deposit its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or collection (ii) take or pay obligations contained in supply arrangements, in each case incurred in the ordinary course of business. ; and
(23) Indebtedness of the Issuer or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.10, (a) in the event that an item of Indebtedness or Preferred Stock (or any proposed Indebtedness portion thereof) meets the criteria of more than one of the categories of Permitted Debt or Preferred Stock described in clauses (1) through (2223) above, above or is entitled to be incurred pursuant to Section 4.10(a)the Coverage Ratio Exception, the Issuer Issuer, in its sole discretion, will be permitted to classify or reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.10 at and will only be required to include the amount and type of such time. Indebtedness or Preferred Stock (or portion thereof) in one of the above clauses or paragraphs; provided that Indebtedness outstanding on the Issue Date under the Senior Term Loan Agreement, Senior Revolving Credit Agreement on date and the Existing Unsecured Notes shall be classified as incurred under Section 4.10(b), and not under the Coverage Ratio Exception; (b) at the time of incurrence, the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above; and (c) the principal amount of Indebtedness outstanding under any clause of this Indenture covenant shall be determined after giving effect to the application of proceeds of any such Indebtedness to refinance any such other Indebtedness.
(d) Accrual of interest or dividends, the accretion of accreted value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness or Preferred Stock will not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any be an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed or Preferred Stock for purposes of this covenant to have been incurred Section 4.10.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first incurred until committed, in the case of revolving credit debt; provided that if such Indebtedness is actually repaidincurred to extend, notwithstanding any provisions under any Credit Facility that provide that such replace refund, refinance, renew or defease other Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).de
Appears in 2 contracts
Sources: Indenture (Warner Music Group Corp.), Indenture (Warner Music Group Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Issuers will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Issuers will not issue any Disqualified Stock or any shares of preferred stock and the Issuer will not permit any of its their Restricted Subsidiaries to issue any Disqualified Stock or any shares of preferred stock; provided, however, that the Issuer Issuers and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or ), issue Disqualified Stock and the Restricted Subsidiaries may or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Issuers and the Guarantors on a consolidated basis for the most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Issuers and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Issuers and the Guarantors their Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 45.0 million and (y) five multiplied by the amount Recurring Monthly Revenue of the Borrowing Base Issuers and their Restricted Subsidiaries as of the most recently ended full fiscal quarter for which internal financial statements are available immediately preceding the date of on which such incurrenceIndebtedness is incurred, lessor, in the case of both clause revolving credit Indebtedness, the date on which the lender or lenders thereunder have entered into a binding agreement (xsubject to customary conditions to funding) and clause (y)to fund such Indebtedness, less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Issuers or any Guarantor of their Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10;
(2) the incurrence by the Issuer or any Guarantors Issuers and their Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (1) and (3) of this Section 4.09(b);
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and by exchange notes issued pursuant to the Registration Rights Agreement and the related Note GuaranteesGuarantees thereof;
(4) the incurrence by the Issuer Issuers or any of its their 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Issuers or any of its their Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $5.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the an Issuer or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) ), that is was permitted by this Indenture to be incurred under pursuant to Section 4.10(a4.09(a) or clauses (2Section 4.09(b)(2), (3), (4), (5), (15) or (16) of this Section 4.10(b5);
(6) the incurrence by the an Issuer or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Issuers and any of its their Restricted Subsidiaries; provided, however, that:
(a) (i) if the any Issuer or any Guarantor is the obligor on holder of such IndebtednessIndebtedness and the borrower is not an Issuer or a Guarantor, such Indebtedness must be evidenced by a promissory note which note shall be pledged to the Collateral Agent in favor of the Holders of Notes and (ii) if the borrower of such Indebtedness is owed to a Restricted Subsidiary that is not an Issuer 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 the an Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Issuers or a Restricted Subsidiary thereof of the Issuers and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the an Issuer or a Restricted Subsidiary thereof, shall of an Issuer will be deemed, in each case, to constitute an incurrence of such Indebtedness by the such Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by the Issuer or any of its the Issuers’ Restricted Subsidiaries to the Issuers or to any of their Restricted Subsidiaries of Hedging Obligations shares of preferred stock; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that are incurred results in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time preferred stock being held by a Person other than as the Issuers or a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness the Issuers; and
(b) any sale or other transfer of the any such preferred stock to a Person that is not either an Issuer or a Restricted Subsidiary of an Issuer, 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 (7);
(8) the incurrence by an Issuer or any of their Restricted Subsidiaries of Hedging Obligations in the ordinary course of business;
(9) the guarantee by an Issuer or any of the Guarantors of Indebtedness of an Issuer or a Restricted Subsidiary of an Issuer that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by an Issuer or any of their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, bids and performance or surety bonds in the ordinary course of business;
(11) the incurrence by an Issuer or any of their 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 Business Days of incurrence;
(12) the incurrence by an Issuer or any of their Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety and similar bonds issued for the account of an Issuer or any of their Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Issuers and any of their Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each other than an obligation for money borrowed);
(13) the incurrence by an Issuer or any of their Restricted Subsidiaries of Indebtedness consisting of (A) the financing of insurance premiums, (B) take-or-pay obligations contained in supply arrangements or (C) deferred compensation or equity-based compensation to current or former officers, directors, consultants, advisors or employees thereof (other than Permitted Holders), in each case in the ordinary course of business;
(14) the incurrence by an Issuer or any of their Restricted Subsidiaries of Indebtedness arising from agreements of an Issuer or any of their Restricted Subsidiaries providing for indemnification, earnout, holdback, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Subsidiary; and
(15) the incurrence by the Issuers or any of the Guarantors 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 (15), not to exceed $5.0 million. The Issuers shall not incur, and shall not 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 a junior Lien basis or in different collateral.
(c) For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (b)(1) through (b)(15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Issuers will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or later divide and re-classify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Notwithstanding the foregoing, Indebtedness under the Credit Agreement (9to the extent applicable) will be deemed to have been incurred on such date in reliance on the exception provided by Section 4.09(b)(1) and the Issuers will not be permitted to re-classify any portion of such Indebtedness thereafter. The accrual and capitalization of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, the accrual and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock Stock, and unrealized losses or preferred stock charges in respect of Hedging Obligations, in each case will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Issuers as accrued. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Issuers 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.
(d) 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;
(102) the incurrence by the Issuer’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 principal amount of the Issuer that was not permitted by this clause (10);Indebtedness, in the case of any other Indebtedness; and
(113) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon of another Person secured by a Lien on 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements assets of the Issuer or such Restricted Subsidiary providing for indemnificationspecified Person, 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 Issuer 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; provided thatlesser of:
(a) the Fair Market Value of such Indebtedness is not reflected on assets at the balance sheet date of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))determination; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any amount of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Person.
Appears in 2 contracts
Sources: Indenture (Interface Security Systems, L.L.C.), Indenture (Interface Security Systems Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise guarantee, acquire, become directly or indirectly liable, contingently or otherwise, with respect to to, or otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including Acquired Debt), Indebtedness) and the Issuer will not issue any Disqualified Stock and the Issuer will Company shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Guarantors may incur Indebtedness (including including, without limitation, Acquired DebtIndebtedness) or issue Disqualified Preferred Stock and the any Restricted Subsidiaries Subsidiary may issue preferred stock, incur Acquired Indebtedness if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding on the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning incurrence of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may the issuance of such Preferred Stock, after giving effect to the incurrence or issuance thereof, the Consolidated Leverage Ratio of the Company would be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 millionless than 4.5 to 1.0 if such incurrence is on or prior to December 23, 2006, and less than 4.0 to 1.0 if such incurrence is after such date.
(b) Section 4.10(a) will shall not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following items of Preferred Stock, as applicable (collectively, “Permitted DebtIndebtedness”):
(1) the incurrence by the Issuer or any Guarantor Company of Indebtedness under Credit Facilities (the Securities issued on the Issue Date and the incurrence by the Guarantors of any Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors other Indebtedness of the Existing IndebtednessCompany and its Restricted Subsidiaries outstanding on the Issue Date after giving effect to the Restructuring;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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 Interest Swap Obligations of the purchase price, or cost of construction or improvement, of property (real or personal), plant or equipment used in the business Company covering Indebtedness of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be; provided, however, that was such Interest Swap Obligations are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on Indebtedness incurred otherwise in accordance with the terms hereof, to the extent the notional principal amount of such Interest Swap Obligations does not permitted by this clause (6)exceed the principal amount of the Indebtedness to which such Interest Swap Obligations relate;
(74) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations Indebtedness under Currency Agreements; provided that are incurred in the ordinary course case of business for the purpose of fixingCurrency Agreements which relate to Indebtedness, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that Currency Agreements do not increase the Indebtedness of the obligor outstanding at any time Company outstanding, other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(5) Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary for so long as such Indebtedness is held by the Company or a Restricted Subsidiary, in each case subject to no Lien held by a Person other than the Company or a Restricted Subsidiary; provided that if as of any date any Person other than the Company or a Restricted Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness;
(6) Indebtedness of the Company to a Restricted Subsidiary for so long as such Indebtedness is held by a Restricted Subsidiary, in each case subject to no Lien; provided that (A) any Indebtedness of the Company to any Restricted Subsidiary is unsecured and subordinated, pursuant to a written agreement, to the Company’s obligations hereunder and under the Securities and (B) if as of any date any Person other than a Restricted Subsidiary owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the Company;
(7) Indebtedness arising out of the Intercompany Agreements, to the extent such Indebtedness is incurred in the ordinary course of business;
(8) Indebtedness arising from the Guarantee 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 after incurrence;
(9) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of performance bonds, bankers’ acceptances, workers’ compensation claims, bid, surety or appeal bonds, payment obligations in connection with self-insurance, insurance premiums or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(10) Indebtedness represented by Purchase Money Indebtedness and Capitalized Lease Obligations not to exceed £25.0 million at any one time outstanding;
(11) Indebtedness of the Company, the Issuer or any Restricted Subsidiary of Indebtedness of to the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, extent that the amount proceeds thereof is included in Fixed Charges of are used promptly to purchase or redeem Securities or deposited to defease the Issuer as accrued;
(10) the incurrence by the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases Securities pursuant 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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceSection 8.02;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer Company or such 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 business, assets or Capital Stock of the Issuer Company or a any 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; provided that:
that (aA) the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds (including the Fair Market Value of non-cash consideration) actually received by (or held in escrow for later release to) the Company and its Restricted Subsidiaries in connection with such disposition (without giving effect to any subsequent changes in value) and (B) such Indebtedness is not reflected on in the balance sheet of the Issuer Company or any Restricted Subsidiary for more than six months, either consecutively or in the aggregate (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on that such balance sheet for purposes of this clause (aB)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any Indebtedness of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer Company consisting of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Subordinated Shareholder Funding;
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of businessRefinancing Indebtedness;
(15) Acquired Indebtedness of a Restricted Subsidiary; provided that, on a pro forma basis after giving effect to the incurrence by of such Acquired Indebtedness, the Issuer Consolidated Leverage Ratio of the Company would be less than 4.5 to 1.0 if such incurrence is on or any Guarantor prior to December 23, 2006, and less than 4.0 to 1.0 if such incurrence is after such date; and
(16) additional Indebtedness of Indebtedness the Company and its Restricted Subsidiaries 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount £25.0 million at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessoutstanding. For purposes of determining compliance with this Section 4.10, :
(1) in the event that any proposed an item of Indebtedness or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt Indebtedness or Preferred Stock described in clauses (1) through (2216) aboveof Section 4.10(b), or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to Company may, in its sole discretion, classify such item of Indebtedness or Preferred Stock on the date of its incurrenceincurrence or, and from time subject to time may reclassifyclause (2) below, later reclassify all or a portion of such item of Indebtedness in any manner that complies with this Section 4.10 at such time. 4.10;
(2) accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness under in the Credit Agreement form of additional Indebtedness with the same terms and the payment of dividends on date Disqualified Capital Stock or Preferred Stock in the form of this Indenture shall additional shares of the same class of Disqualified Capital Stock or Preferred Stock will not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any be an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) or an issuance of paragraph (b) of this Section 4.10 shall be deemed Preferred Stock for purposes of this covenant Section 4.10;
(3) the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to have been this Section 4.10 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the result of fluctuations in the exchange rates of currencies;
(4) 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
(5) if obligations in respect of letters of credit, bankers’ acceptances or other similar instruments are incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under pursuant to any Credit Facility that provide that and the letters of credit, bankers’ acceptances or other similar instruments relate to other Indebtedness, then such other Indebtedness is deemed to shall not be borrowed, repaid and reborrowed daily (or otherwise periodically)included.
Appears in 2 contracts
Sources: Indenture (Global Crossing Uk Telecommunications LTD), Indenture (Global Crossing LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Borrower Agent and the Parent Guarantors will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Parent Guarantors and the Borrower Agent will not issue any Disqualified Stock and the Issuer will not permit any of its their Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Borrowers and the Restricted Parent Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors and Specified Foreign Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerPyxus Topco’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issuedissued (and all payments that would have been due with respect to such Indebtedness or preferred stock were paid and included in Fixed Charges to the extent applicable), as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a10.03(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer any Parent Guarantor, any Borrower or any Guarantor of their Restricted Subsidiaries of Indebtedness and letters of credit under (A) the Exit Term Loan Credit Facilities Agreement and (and B) the incurrence by the Guarantors of Guarantees thereof) Exit Notes Indenture in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunderi) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the an aggregate amount of all Net Proceeds of Asset Salesequal to $607,000,000, applied by the Issuer or plus any Guarantor to repay any Indebtedness under Credit Facilities interest that is paid in kind (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in each of the case of both clause foregoing clauses (xA) and clause (yB), amounts outstanding under any Qualified Receivables TransactionsPermitted Refinancing Indebtedness in respect thereof) (collectively, “Permitted Exit Financing Indebtedness”);
(2ii) the incurrence by the Issuer or any Guarantors Parent Guarantors, the Borrowers and their Restricted Subsidiaries of the Existing Indebtedness;
(3iii) Indebtedness created hereunder and under the other Loan Documents;
(iv) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer any Parent Guarantor, any Borrower or any of its their 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $21.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture Agreement to be incurred under Section 4.10(a10.03(a) hereof or clauses (2ii), (3iii), (4iv), (5), (15v) or (16xvii) of this Section 4.10(b10.03(b);
(6vi) the incurrence by the Issuer or any Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among from the Issuer and Borrower Agent, any of its Parent Guarantor and/or any other Restricted Subsidiaries; provided, however, that:
(a) if that any such Indebtedness shall be to the Issuer extent owed by the Borrower Agent or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notesor any Guarantee thereof then due hereunder, in the case of the Issuer, Borrower Agent or the Note Guarantee, in the case of a Guarantor, as applicable; and
(b) (i) any subsequent issuance or transfer of Equity Interests provided, that results in any such Indebtedness being held by a intercompany indebtedness incurred under intercompany notes existing on the Closing Date shall be permitted so long as such intercompany notes are so expressly subordinated within 30 days after the Closing Date; provided, further, that if as of any date any Person other than the Issuer any Parent Guarantor, any Borrower or a any of their Restricted Subsidiary thereof and (ii) any sale Subsidiaries owns or other transfer of holds any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereofIndebtedness, such date shall be deemed, in each case, to constitute an deemed the date of incurrence of such Indebtedness by the Issuer such Parent Guarantor, such Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Parent Guarantors’ or any Borrower’s Restricted Subsidiaries to any Parent Guarantor, to any Borrower or to any of their 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 a Parent Guarantor, a Borrower or a Restricted Subsidiary of a Parent Guarantor or a Borrower; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either a Parent Guarantor, a Borrower or a Restricted Subsidiary of a Parent Guarantor or a Borrower; 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 (vii);
(viii) the incurrence by the Issuer any Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Hedging Obligations entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;
(ix) the incurrence by any Borrower, any Parent Guarantor or any of their Restricted Subsidiaries of Indebtedness owing under documentary or standby letters of credit for the purchase of goods or other merchandise generally;
(a) Indebtedness in respect of OECD accounts receivable financings with recourse against any Parent Guarantor, any Borrower or any of their Restricted Subsidiaries in an aggregate amount not to exceed $50.0 million at any time outstanding and (b) non-OECD accounts receivable financings with recourse against any Parent Guarantor or any of their Restricted Subsidiaries (other than a Borrower) in an aggregate amount not to exceed $50.0 million at any time outstanding;
(xi) the Guarantee by any Parent Guarantor, any Borrower or any of their Restricted Subsidiaries of Indebtedness of any Parent Guarantor, any Borrower or a Restricted Subsidiary of any Parent Guarantor or any Borrower to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 10.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Loans, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(xii) the incurrence by any Parent Guarantor, any Borrower or any of their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business;
(xiii) the incurrence by any Parent Guarantor, any Borrower or any of their Restricted Subsidiaries of Indebtedness owing under overdraft facilities in connection with cash management arrangements and other Bank Product Obligations;
(xiv) the incurrence by any Foreign Subsidiaries of additional Indebtedness in an aggregate amount (or accreted value, as applicable) at any time outstanding not to exceed the greater of (a) $975 million and (b) the sum of (x) 65% of Eligible Inventory, plus (y) 65% of Permitted Advances on Purchases of Tobacco, plus (z) 85% of Eligible Receivables, and any Guarantees of such Indebtedness by the Borrower Agent;
(xv) unsecured Guarantees by any Parent Guarantor, any Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business in an aggregate amount not to exceed $250.0 million in the aggregate at any time outstanding;
(xvi) Guarantees by any Parent Guarantor, any Borrower or any Restricted Subsidiary which are incurred in the ordinary course of business for the purpose of fixingcarrying unsold tobacco inventories held against Confirmed Orders and other Guarantees by any Parent Guarantor, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer Borrower or any Restricted Subsidiary incurred in the ordinary course of business with respect to Uncommitted Inventories in an aggregate amount not to exceed the amount of such Uncommitted Inventories; and
(xvii) the incurrence by any Borrower, any Guarantor or any Specified Foreign Subsidiary of unsecured Indebtedness or Junior Lien Debt in an aggregate principal amount not to exceed $50.0 million at any time outstanding. Other than in connection with the exchange of Existing Exit Notes and Existing Exit Term Loans with New Notes and New Term Loans, as applicable, the Borrower Agent and the Parent Guarantors will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer Borrower Agent or a Restricted Subsidiary such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the ABL Facility and the Guarantees thereof 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 Issuer Borrower Agent or any Guarantor solely by virtue of being unsecured or by virtue of being secured on junior priority basis. For purposes of determining compliance with this Section 10.03, in the event that was permitted an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xvii) above, or is entitled to be incurred by another provision pursuant to Section 10.03(a), hereof, the Borrower Agent will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10; provided that, in 10.03. Permitted Exit Financing Indebtedness may be incurred solely under clause (i) of the case definition of a Guarantee of any Restricted Subsidiary that is Permitted Debt and may not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the be reclassified. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10covenant; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Borrower Agent as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 10.03, the maximum amount of Indebtedness is actually repaidthat any Parent Guarantor, notwithstanding any provisions under Borrower or any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this Section 10.03 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(i) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)ii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(iii) 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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Abl Credit Agreement (Pyxus International, Inc.), Abl Credit Agreement (Pyxus International, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and the Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (xi) $385.0 million and 550.0 million, (yii) the amount 32.5% of the Borrowing Base as of Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence and (iii) the Borrowing Base at the time of incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 65.0 million or and (yii) 33.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (1514) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of self-Recourse Debt; providedinsurance obligations or bid, howeverplugging and abandonment, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiaryappeal, such event shall be deemed to constitute an incurrence of Indebtedness reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred Subsidiary in a transaction permitted by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionthis Indenture; provided that:
(a) that such Indebtedness obligation is not reflected as a liability on the face of the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;Permitted Acquisition Indebtedness; and
(15) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount exceed, at any one time outstanding outstanding, the greater of (with letters of credit being deemed to have a principal amount equal to the maximum potential liability i) $65.0 million and (ii) 3.75% of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment date of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessissuance. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2215) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien 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 payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to have been incurred the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date such of determination; and
(2) the amount of the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)of the other Person.
Appears in 2 contracts
Sources: Indenture (Extraction Oil & Gas, Inc.), Indenture (Extraction Oil & Gas, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 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 the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 reimbursement obligations of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions30.0 million;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $5.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (1512) or (16) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (iB) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 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 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09(b); provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of workers’ compensation claims, self-Recourse Debt; providedinsurance obligations, howeverbankers’ acceptances, that if any such Indebtedness ceases to be Non-Recourse Debt performance and surety bonds in the ordinary course of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10)business;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in arising from the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, 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 with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed is covered within 30 days following such drawing or incurrencefive Business Days;
(12) the incurrence by the Issuer Company or any Guarantor of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary (including Acquired Debt); provided that the principal amount of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (12) and all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), does not exceed $15.0 million;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness to the extent that the net proceeds thereof are immediately deposited to defease or discharge the Notes in full, in each case, in accordance with the terms of this Indenture;
(14) the incurrence by the Company’s Foreign Subsidiaries of customary commercial letters of credit, “bank guarantees” or similar obligations in the ordinary course of business consistent with past practices;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for bona fide indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets asset or Capital Stock of the Issuer 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; provided that:
that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of the Issuer or any Restricted Subsidiary of the Company (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that such balance sheet for purposes of this clause (a15)(a)); and
and (b) the maximum assumable liability in respect of that any such Indebtedness incurred in connection with a disposition shall at no time exceed the aggregate gross proceeds including non-cash proceeds (the fair market value of those such non-cash proceeds being measured at the time received and without giving effect to any such subsequent changes in value) actually received by the Issuer and/or that Company and its Restricted Subsidiary in connection with that such disposition;; and
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(1416) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refinance, replace, defease or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 15.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Indenture (CPM Holdings, Inc.), Indenture (CPM Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or preferred stockany shares of Preferred Stock; provided, however, that the Issuer and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockor Preferred Stock, if the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding as of the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 to 11.00, 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 the Disqualified Stock or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or any Guarantor and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and Facilities, excluding the incurrence by the Guarantors of Guarantees thereof) Senior Interim Loan Credit Agreement, in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunderface amount thereof) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence3,900.0 million, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer or any Guarantor Restricted Subsidiary since the Acquisition Closing Date to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3ii) the incurrence by the Issuer and its Restricted Subsidiaries of Existing Indebtedness;
(iii) (a) the incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes to be issued on and the date of this Indenture and related Note Guarantees, and (b) Indebtedness under the Senior Interim Loan Credit Agreement in an amount not to exceed $1,100 million less the aggregate principal amount of the Notes plus any additional Loans issued as PIK Interest and any Exchange Notes issued in exchange for any Loans and any additional Exchange Notes issued as PIK Interest thereon;
(4iv) the incurrence Indebtedness (including Capital Lease Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsSubsidiaries, mortgage financings to finance the purchase, lease 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, improvement of property (real or personal), plant ) or equipment that is used or useful in the business of the Issuer or any of its Restricted Subsidiariesa Permitted Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all together with any Permitted Refinancing Indebtedness incurred to refundin respect thereof and all other Indebtedness, refinance or replace any Indebtedness incurred pursuant to Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), iv) not to exceed, exceed $125.0 million at any time outstanding; so long as such Indebtedness exists at the date of such purchase, the greater of (x) $30.0 million lease or (y) 3% of Consolidated Tangible Assets of the Issuerimprovement, or is created within 270 days thereafter;
(5v) the incurrence by the Issuer or any of its Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2ii), (3iii), (4iv), (5v), (15xiii), (xv), (xxi), (xxii) or and (16xxiii) of this Section 4.10(b)4.09(b) including additional Indebtedness incurred to pay premiums and fees in connection therewith;
(6vi) the incurrence by the Issuer or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(a1) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Issuer 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 the Issuer, or Notes and the Note Guarantee, in the case of a GuarantorGuarantees; and
(b) (i2) any (A) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and of the Issuer, or (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereofof the Issuer, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any Restricted Subsidiary of shares of Preferred Stock; provided, however, that any (1) subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Issuer or a Restricted Subsidiary of the Issuer, or (2) sale or other transfer of any such Preferred Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, 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 (vii);
(viii) the incurrence by the Issuer or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 1) the Guarantee guarantee by the Issuer or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.104.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed and (2) any guarantee by a Restricted Subsidiary that is not a Guarantor of Indebtedness of another Restricted Subsidiary that is not a Guarantor that was permitted to be incurred by another provision of this Section 4.09;
(x) Indebtedness incurred by the Issuer or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits, or property, casualty or liability insurance, or other Indebtedness with respect to reimbursement type 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;
(xi) the incurrence by the Issuer or any Restricted Subsidiary 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;
(xii) receivables or factoring arrangements in the ordinary course of business;
(xiii) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earnouts 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; provided, however, that
(1) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary prepared in accordance with GAAP (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiii)(1)) and
(2) the maximum assumable liability in respect of all such Indebtedness 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 Issuer and the Restricted Subsidiaries in connection with such disposition;
(xiv) Indebtedness of the Issuer or any Restricted Subsidiary consisting of (1) the financing of insurance premiums or (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(xv) Indebtedness, Disqualified Stock or Preferred Stock of (1) the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (2) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that, in the case of a Guarantee this clause (xv)(2) such Indebtedness, Disqualified Stock or preferred stock is not incurred in contemplation of such acquisition or merger; provided further that after giving effect to such acquisition or merger, either
(A) 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) or
(B) the Fixed Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries is equal to or greater than immediately prior to such acquisition or merger;
(xvi) [intentionally omitted];
(xvii) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16in the ordinary course of business;
(9xviii) Indebtedness consisting of Indebtedness issued by the Issuer or any Restricted Subsidiary to future, current or former officers, directors and employees thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any direct or indirect parent company of the Issuer to the extent described in Section 4.07(b)(iv);
(xix) customer deposits and advance payments received in the ordinary course of business from customers for goods purchased in the ordinary course of business;
(xx) Indebtedness incurred by a Restricted Subsidiary in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms on a recourse basis;
(xxi) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary (including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxi)) equal to 200% of the net cash proceeds received by the Issuer since immediately after the Acquisition Closing Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) to the extent such net cash proceeds or cash have not been applied pursuant to Section 4.07(a)(3)(ii) to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof);
(xxii) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (xxii), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxii), not to exceed $125.0 million (or the equivalent thereof, measured at the time of each incurrence, in applicable foreign currency); and
(xxiii) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (xxiii), including any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxiii), does not at any one time outstanding exceed $150.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxiii) above, or is entitled to be incurred pursuant to Section 4.09(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt”. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided4.09. Notwithstanding any other provision of this Section 4.09, in each such case, that the maximum amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a))1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and
(b2) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any principal amount of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that case of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Indebtedness.
Appears in 2 contracts
Sources: Indenture (Allison Transmission Holdings Inc), Indenture (Allison Transmission Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock and the any Restricted Subsidiaries Subsidiary may issue preferred stock, stock (including Disqualified Stock) if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 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, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) 4.03 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1a) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions2.75 billion;
(2b) Existing Indebtedness;
(c) the incurrence by the Issuer or any Company and the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4d) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4d), not to exceed, exceed $100.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5e) the incurrence by the Issuer 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 is was permitted by this the Indenture to be incurred under the first paragraph of this Section 4.10(a4.03 (excluding 8.125% Notes repurchased pursuant to the tender offer therefor launched by the Company substantially concurrently with the initial offering of the Notes) or clauses (2b), (3c), (4d), (5j), (15m), (n) or this clause (16e) of this Section 4.10(b)paragraph;
(6f) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging (i) interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding or swapping interest rate, commodity price or foreign currency (ii) exchange rate risk (with respect to obligations under any agreement or Indebtedness, or with respect to reverse any asset, of such Person that is payable or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time denominated in a currency other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderU.S. Dollars;
(8) h) the Guarantee by the Issuer Company or any of the Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.03;
(9i) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock or preferred stock (including Disqualified Stock) in the form of additional shares of the same class of Disqualified Stock or preferred stock (including Disqualified Stock) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock (including Disqualified Stock) for purposes of this Section 4.104.03; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10j) the incurrence by issuance of Convertible Subordinated Debentures and/or the Issuer’s Unrestricted Subsidiaries issuance of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of Convertible Preferred Stock in an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary aggregate principal amount (with the liquidation value of the Issuer that was Convertible Preferred Stock being treated as its principal amount for this purpose) not permitted by to exceed $750.0 million at any one time outstanding pursuant to this clause (10j), plus the issuance of any related securities issued by a subsidiary trust or similar financing vehicle in connection therewith;
(11k) Indebtedness of the incurrence by the Issuer Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries guarantees, indemnities, hold backs or obligations in respect of Indebtedness constituting reimbursement obligations purchase price adjustments in connection with respect to letters the acquisition or disposition of credit issued in the ordinary course of businessassets, including, without limitation, shares of Capital Stock of Restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or disposition of assets which are contingent on the performance of the assets acquired or disposed of;
(l) Indebtedness represented by (i) letters of credit in respect for the account of the Company or any Restricted Subsidiary or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the extent that such letters of credit and other obligations, as the case may be, are intended to provide security for workers’ compensation claims or claims, payment obligations in connection with self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to participation in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale government reimbursement or other transfer of any such shares of Disqualified Stock programs or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary other similar requirements in the ordinary course of business;
(15m) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness to the extent the proceeds thereof are used to purchase Notes pursuant to a Change of Control Offer; and
(n) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may include, but is not limited to, Indebtedness of the types referred to in the foregoing clauses (a) through (m)) 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 (15n), not to exceed $75.0 200.0 million;.
(16o) the incurrence by the Foreign Company and its Restricted Subsidiaries of the Issuer of Indebtedness under the 364-Day Credit Facility in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17)o) not to exceed (a) $1.9 billion minus (b) amounts applied to repay Indebtedness under the 364-day Credit Facility, when aggregated including with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed net proceeds from the maximum amount permitted under Section 4.10(b)(1)Concurrent Financing Transactions;
(18p) the incurrence Indebtedness of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are outstanding on the date on which such Restricted Subsidiary was acquired by the Issuer Company or otherwise became a Restricted Subsidiary (other than Indebtedness incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Subsidiary of the Company or merged into was otherwise acquired by the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedCompany), provided that after giving effect thereto, (a) the Company would be permitted to any such transactionincur at least $1 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph above, including the incurrence and/or repayment or retirement of any Indebtedness, (b) the Fixed Charge Coverage Ratio would be equal to or greater no worse than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessthereto. For purposes of determining compliance with this Section 4.104.03, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1a) through (22n) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.03, the Issuer Company will be permitted to classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time4.03. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of this Indenture shall which Notes are first issued and authenticated hereunder will be deemed to have been incurred on such date pursuant in reliance on the exception provided by clause (a) of the definition of Permitted Debt. The Company will not permit any of its Subsidiaries (other than Purchasing) to Section 4.10(b)(1). Any Guarantee the 3.25% Convertible Senior Debentures due 2035 or any Permitted Refinancing Indebtedness incurred under Credit Facilities in respect thereof pursuant to clause (15) of paragraph (b) of this Section 4.10 shall the immediately preceding paragraph, except that any such Permitted Refinancing Indebtedness may be deemed for purposes of this covenant Guaranteed by a Guarantor on a basis subordinated to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Guarantor’s Subsidiary Guarantee.
Appears in 2 contracts
Sources: Fourth Supplemental Indenture (Omnicare Inc), Fifth Supplemental Indenture (Omnicare Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Holdings will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Holdings will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that Holdings may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuer Company and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockor Preferred Stock, if the Fixed Charge Coverage Ratio for the Issuer’s Holdings’ most 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 Preferred Stock is issued issued, as the case may be, would have been at least 2.00 to 11.00, 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 the Disqualified Stock or preferred stock Preferred Stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a3.2(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Holdings and any Guarantor Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Debt Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Holdings and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xa) $385.0 190.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Dispositions applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Indenture to permanently repay any Indebtedness under Credit Facilities a Debt Facility (and, in the case of any revolving credit Indebtedness under a Credit FacilityIndebtedness, to effect a corresponding permanent commitment reduction thereunder) pursuant to Section 4.13 and less, in (b) the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsBorrowing Base;
(2) the incurrence by Holdings, the Issuer or any Guarantors of Company and the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries Guarantor of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by Holdings and its Restricted Subsidiaries of the Existing Indebtedness;
(4) the incurrence by the Issuer Holdings or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred within 360 days of the acquisition or completion of construction or installation for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Holdings or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsAttributable Debt relating to a sale and leaseback transaction, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed, exceed $35.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer Holdings 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under paragraph (a) of this Section 4.10(a) 3.2 or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b3.2(b);
(6) the incurrence by the Issuer Holdings or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Holdings, the Issuer Company and any of its the Restricted Subsidiaries; provided, however, that:
(a) if Holdings, the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not Holdings, the Company 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 the IssuerCompany, or the Note Guarantee, in the case of Holdings or a GuarantorGuarantor (provided that payments with respect to such Indebtedness may be made so long as no Event of Default has occurred and is continuing); and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Holdings, the Issuer Company or a Restricted Subsidiary thereof of Holdings and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Holdings, the Issuer Company or a Restricted Subsidiary thereofof Holdings, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by Holdings, the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of Holdings’ Restricted Subsidiaries to Holdings 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 Holdings or a Restricted Subsidiary of Holdings; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is not either Holdings or a Restricted Subsidiary of Holdings, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Holdings or any of the Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Holdings or a Restricted Subsidiary of the Issuer Holdings that was permitted to be incurred by another provision of this Section 4.103.2; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by Holdings, the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit, bankers’ acceptances, performance and surety bonds or other obligations in respect of workers’ compensation claims, health, disability, or other employee benefits or property, casualty or liability insurance or self-insurance obligations;
(11) Indebtedness arising from agreements of Holdings or a Restricted Subsidiary of Holdings providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of Holdings, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by Holdings and its Restricted Subsidiaries in connection with such disposition;
(12) Indebtedness of Foreign Subsidiaries in an aggregate principal amount not to exceed $35.0 million at any time outstanding;
(13) the incurrence by Holdings or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days;
(14) the incurrence by Holdings or any of the Restricted Subsidiaries of Indebtedness in connection with the repurchase, redemption or other acquisition or retirement of Equity Interests held by any current or former officer, director or employee of any Parent, Holdings, the Company or any of the Restricted Subsidiaries; provided that such repurchase, redemption or other acquisition or retirement is permitted by Section 3.3(b)(5);
(15) (x) the incurrence by Holdings of Indebtedness or Disqualified Stock, or the incurrence by a Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock, to finance the acquisition of a Permitted Business or the Capital Stock of a Person engaged in a Permitted Business or (y) the incurrence by Holdings or a Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock of Persons that are acquired by Holdings or any Restricted Subsidiary or merged into Holdings or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that in the case of (x) and (y) after giving effect to such acquisition or merger on a Guarantee pro forma basis (A) Holdings would be permitted to incur at least $1.00 of any Restricted Subsidiary that additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test or (B) the Fixed Charge Coverage Ratio of Holdings is not a Guarantor, (i) greater than 1.75 to 1.00 and (ii) greater than the Fixed Charge Coverage Ratio of Holdings immediately prior to such Restricted Subsidiary complies with Section 4.16acquisition or merger;
(916) endorsement of instruments or other payment items for deposit;
(17) Indebtedness in respect of letters of credit, performance bonds, surety bonds or like obligations in respect of performance guarantees or similar commitments by Holdings or any of its Restricted Subsidiaries in the ordinary course of business;
(18) the incurrence by Holdings or Restricted Subsidiary of additional Indebtedness (which additional Indebtedness may be incurred under the ABL Credit Facility) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $40.0 million; and
(19) all premium (if any), fees, expenses, charges and additional and contingent interest on Indebtedness incurred in compliance with this Section 3.2.
(c) For purposes of determining compliance with this Section 3.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to paragraph (a) of this Section, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 3.2. Notwithstanding the foregoing, Indebtedness under the ABL Credit Facilities outstanding on the date on which Notes are first issued under this Indenture will be deemed to have been incurred on such date under Section 3.2(b)(1) above. The accrual of interest (including post-petition interest), the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.103.2; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Holdings as accrued. Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that Holdings or any Restricted Subsidiary may incur pursuant to this Section3.2 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 the case of any Indebtedness issued with original issue discount;
(102) the incurrence by the Issuer’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 principal amount of the Issuer that was not permitted by this clause (10);Indebtedness, in the case of any other Indebtedness; and
(113) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon of another Person secured by a Lien on 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements assets of the Issuer or such Restricted Subsidiary providing for indemnificationspecified Person, 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 Issuer 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; provided thatlesser of:
(a) the Fair Market Value of such Indebtedness is not reflected on assets at the balance sheet date of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))determination; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any amount of the Issuer’s Restricted Subsidiaries issued to Indebtedness of the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than Person. Holdings will not, and will not permit the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer Company or any Guarantor to, directly or indirectly, incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness (including Acquired Debt) that is subordinated or junior in right of payment to any Indebtedness of Holdings, the Company or any Guarantor, unless such Indebtedness is expressly subordinated in an aggregate principal amount (right of payment to the Notes or accreted valuesuch Guarantor’s Note Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of Holdings, the Company or such Guarantor, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by case may be. For the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms purposes of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through unsecured Indebtedness shall not be treated as subordinated or junior to secured Indebtedness merely because it is unsecured and (222) above, senior Indebtedness shall not be treated as subordinated or is entitled junior to be incurred pursuant any other senior Indebtedness merely because it has a junior priority with respect to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)same collateral.
Appears in 2 contracts
Sources: Indenture (Edgen Group Inc.), Indenture (Edgen Murray II, L.P.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuer or Company and any Subsidiary Guarantor of (A) additional Indebtedness under Credit Facilities (and Facilities, provided that giving effect to such incurrence, the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) of all Indebtedness under Credit Facilities then outstanding under this paragraph (1), together with any Indebtedness incurred pursuant to the following clause (B), does not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness or debt securities under Credit Facilities (and, in the case of or to repay any revolving credit Indebtedness under a Credit Facility, to Facilities and effect a corresponding commitment reduction thereunder) , in each case pursuant to Section 4.13 4.10 hereof and less(y) 300% of the Consolidated Cash Flow of the Company and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available, calculated on a pro forma basis in the case manner described in the definition of both “Debt to Cash Flow Ratio” and (B) without duplication, all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the foregoing clause (x) and A); provided, however, that the maximum amount permitted under this clause (y), amounts outstanding 1) shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent that the incurrence of such additional Indebtedness is permitted pursuant to any Qualified Receivables Transactionsof the other provisions of this Section 4.09;
(2) the incurrence by the Issuer or Company and its Restricted Subsidiaries of any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the $3.5B Notes to be issued on the date of this Indenture Issue Date and any related Exchange Notes (as defined in the Base Indenture) to be issued in exchange therefor pursuant to the Registration Rights Agreement, and, in each case, the related Note Guarantees;
(4) the incurrence by the Issuer 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceedexceed 5.0% of the Company’s Total Assets, at the time of any time outstanding, the greater of such incurrence pursuant to this clause (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer4);
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this the Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15) or (1624) of this Section 4.10(b)paragraph;
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Issuer Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereof of the Company, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereofof the Company, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, HoldCo, the Company or a Restricted Subsidiary of the Company, or a Guarantor, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not other than for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock guarantee shall be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of workers’ compensation claims, self-Recourse Debt; providedinsurance obligations, howeverbankers’ acceptances, that if deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any such Indebtedness ceases to be Non-Recourse Debt Guarantees or letters of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Company or any of its Restricted Subsidiaries, (B) in respect to letters of credit issued netting, overdraft protection and other arrangements arising under standard business terms of any bank at which the Company or any Restricted Subsidiary maintains an overdraft, cash pooling or other similar facility or arrangement or (C) in respect of the financing of insurance premiums in the ordinary course of 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 or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued in connection with any Permitted Joint Venture Investment;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Company’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13), at any time outstanding not to exceed the greater of (x) $100.0 million and (y) 1.0% of the Company’s Total Assets at the time of such incurrence;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Contribution Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (including Acquired Debt or Indebtedness) used to finance an acquisition of or a merger with another Person, provided that, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Company immediately prior to such transaction;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is ), so long as the amount does not reflected on exceed the balance sheet of gross proceeds actually received by the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary thereof in connection with that such disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(1417) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(1518) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes;
(19) the incurrence by the Company or any of the Subsidiary Guarantors 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1519), not to exceed the greater of (x) $75.0 million100.0 million and (y) 1.0% of the Company’s Total Assets as of the time of incurrence;
(1620) the incurrence by the Foreign Company or any Restricted Subsidiaries of the Issuer Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(21) the incurrence by the Company or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Notes and the Note Guarantees issued to current or former employees or directors of Parent, the Company or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (5) of Section 4.07(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(22) the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(23) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Company or any Restricted Subsidiary of such Indebtedness; and
(24) the incurrence by Restricted Subsidiaries thereunderthat are not Guarantors of Indebtedness; provided, however, that the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (24), when aggregated with the principal amount (or accreted value) of all other Indebtedness then outstanding and incurred pursuant to this clause (24), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1624), does not exceed the greater of (x) $75.0 million and (y) 0.75% of the Company’s Total Assets at the time of such incurrence. The Company will not incur, and will not permit any Subsidiary Guarantor to exceed $50.0 million;
(17) the incurrence of incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by a Receivables Subsidiary clause (6) above) that is not recourse contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Issuer or any other Restricted Subsidiary of Notes and the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee on substantially identical terms; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedhowever, that after giving effect no Indebtedness shall be deemed to be contractually subordinated in right of payment to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company or any Restricted Subsidiary supported Guarantor solely by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount virtue of such letter Indebtedness being unsecured or by virtue of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit such Indebtedness being secured on a first or collection in the ordinary course of businessjunior Lien basis. For purposes of (x) determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2224) above, or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer Company will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. 4.09 (or, for the avoidance of doubt, after the consummation of the Merger, in any manner that complies with Section 4.09 of the Base Indenture) and (y) determining the amount of Indebtedness under the Credit Agreement on date of this Indenture shall that may be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (11)(A)(y) of paragraph Section 4.09(b), the Company may elect, pursuant to an Officers’ Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (band any refinancing with respect thereto) as being incurred at such time, in which case any subsequent incurrence of this Section 4.10 Indebtedness under such commitment or refinancing, as the case may be, shall not be deemed deemed, for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaidcalculation, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowedan incurrence at such subsequent time. The accrual of interest, repaid and reborrowed daily (or otherwise periodically).the
Appears in 2 contracts
Sources: First Supplemental Indenture (Metropcs Communications Inc), Second Supplemental Indenture (Metropcs Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Neither AREP nor any Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will not neither AREP nor any Guarantor shall issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockStock; provided, however, that the Issuer and the Restricted Subsidiaries AREP or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if immediately after giving effect to the Fixed Charge Coverage Ratio for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such incurrence of additional Indebtedness is incurred (including Acquired Debt) or such issuance of Disqualified Stock or preferred stock is issued would have been at least 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning ratio of such four-quarter period; provided, however, that the aggregate principal amount of all outstanding Indebtedness or Disqualified Stock that may be (excluding Indebtedness incurred under this paragraph by Restricted pursuant to clauses (4), (7) and (8) of Section 4.09(b) and any Hedging Obligations of AREP's Subsidiaries that are not Guarantors shall Guarantors) of AREP and its Subsidiaries (including any Guarantor) on a consolidated basis determined in accordance with GAAP (including an amount of Indebtedness equal to the principal amount of any Guarantees by AREP or its Subsidiaries (including any Guarantor) of any Indebtedness of a Person (that is not exceed $50.0 millionAREP or a Subsidiary) to the extent such Guarantees were not included in computing AREP's or its Subsidiaries' (including any Guarantor's) outstanding Indebtedness) to the Tangible Net Worth of AREP and its Subsidiaries (including any Guarantor) on a consolidated basis, would have been less than 1.75 to 1.
(b) The provisions of Section 4.10(a4.09(a) will shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer AREP or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guaranteesthe Exchange Notes to be issued pursuant to the Registration Rights Agreement;
(42) the incurrence by the Issuer AREP 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries Guarantor 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 was incurred under Section 4.10(a4.09(a) or clauses (21), (3), (4), (5), (152) or (169) of this Section 4.10(b)4.09(b) or any Existing Indebtedness;
(3) the incurrence by AREP or any Guarantor of intercompany Indebtedness between or among AREP and any of its Subsidiaries (including AREH) or the issuance of Disqualified Stock by any Guarantor to AREP;
(4) the incurrence by AREP or any Guarantor of Hedging Obligations that are incurred in the normal course of business;
(5) the incurrence by AREP or any Guarantor 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;
(6) 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:
(a) if the Issuer AREP or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)Existing Indebtedness;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer any agreement entered into by AREP or such Restricted Subsidiary AREH providing for indemnification, adjustment of purchase price adjustment or similar obligations, in each case, incurred or assumed in connection with the disposition an asset sale;
(8) Indebtedness of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all AREP or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred Guarantor attributable to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))Bad Boy Guarantees; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(149) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer AREP 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (159), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount 10.0 million at any one time outstanding outstanding. Neither AREP nor any Guarantor shall incur any Indebtedness (with letters including Permitted Debt) that is contractually subordinated in right of credit being payment to any other Indebtedness of AREP or any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the Note Guarantee, as applicable, on substantially identical terms; provided, however, that no Indebtedness of AREP or any Guarantor shall be deemed to have be contractually subordinated in right of payment to any other Indebtedness of AREP or any Guarantor for purposes of this paragraph solely by virtue of being unsecured or secured to a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance lesser extent or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;on a junior Lien basis.
(17i) the incurrence any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than AREP or a Subsidiary of AREP (including any Guarantor) and (ii) any sale or other transfer of any such Indebtedness by to a Receivables Subsidiary Person that is not recourse either AREP or a Subsidiary of AREP (including any Guarantor) shall be deemed, in each case, to the Issuer constitute an incurrence of such Indebtedness by AREP or any Guarantor, that is not intercompany Indebtedness; provided that in the case of clause (a), that no restriction on the payment of principal, interest or other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred obligations in connection with such intercompany Indebtedness shall be required by such subordinated terms except during the occurrence and continuation of a Qualified Receivables Transaction; provided, that, the aggregate amount Default or Event of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessDefault. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (229) above, above or is entitled to be incurred pursuant to Section 4.10(a4.09(a), in each case, as of the Issuer will be permitted to date of incurrence thereof, AREP shall, in its sole discretion, classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at 4.09 and such timeIndebtedness shall be treated as having been incurred pursuant to such clauses or Section 4.09(a), as the case may be, designated by AREP. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages on any Indebtedness under in the Credit Agreement form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on date Disqualified Stock in the form of this Indenture additional shares of the same class of Disqualified Stock shall not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any be an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) or an issuance of paragraph (b) of this Section 4.10 shall be deemed Disqualified Stock for purposes of this covenant Section 4.09. Notwithstanding any other provision of Section 4.09, the maximum amount of Indebtedness that AREP or any Guarantor may incur pursuant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is Section 4.09 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (American Real Estate Partners L P), Indenture (American Real Estate Holdings L P)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) ), or issue shares of Disqualified Stock and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness or issue preferred stock, stock if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) . The foregoing provisions will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Guarantor the Subsidiary Guarantors of Indebtedness under Credit Facilities (and the incurrence by the Guarantors including letters of Guarantees thereof) in an aggregate principal amount at any one time outstanding (credit, with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed under the greater of (x) $385.0 million and (y) Senior Credit Facility; provided that the aggregate principal amount of all Indebtedness (including letters of credit) outstanding under the Borrowing Base as of the date of Senior Credit Facility after giving effect to such incurrence, less, in the case of both clause (x) and clause (y), incurrence does not exceed an amount equal to $100.0 million less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer or any Guarantor to permanently repay any such Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10 hereof;
(2ii) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer and its Restricted Subsidiaries Company of Indebtedness represented by the Notes to be issued on and the date Exchange Notes and the incurrence by the Subsidiary Guarantors of this Indenture and related Note Indebtedness represented by the Subsidiary Guarantees;
(4iv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed, exceed $5.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer 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 is either the Existing Indebtedness or was permitted by this Indenture to be incurred under Section 4.10(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5), (15v) or (16ix) of this Section 4.10(b)paragraph;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (ai) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
Notes and (b) (iii)(A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries a Subsidiary Guarantor of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or with respect to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and floating rate Indebtedness that do not increase is permitted by the Indebtedness terms of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderthis Indenture to be outstanding;
(8) viii) the Guarantee guarantee by the Issuer Company or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Guarantor that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10ix) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations in connection with respect the acquisition by the Company or a Restricted Subsidiary of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to letters of credit issued such acquisition by the Company or a Restricted Subsidiary and was not incurred in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insuranceconnection with, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims in contemplation of, such acquisition by the Company or self-insurancea Restricted Subsidiary; provided, however, that, upon and provided further that the drawing principal amount of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrenceIndebtedness does not exceed $5.0 million at any time outstanding;
(12x) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (15x), not to exceed $75.0 10.0 million;; and
(16xi) the incurrence by the Foreign Restricted Company's Unrestricted Subsidiaries of the Issuer Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being Unrestricted Subsidiary, such event shall be deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the constitute an incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under Company that was not permitted by this clause (17xi), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10covenant, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22x) above, above or is entitled to be incurred pursuant to Section 4.10(a)the first paragraph of this covenant, the Issuer will be permitted to Company shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such timecovenant. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness under in the Credit Agreement form of additional Indebtedness with the same terms, and the payment of dividends on date Disqualified Stock in the form of this Indenture shall additional shares of the same class of Disqualified Stock will not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any be an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) or an issuance of paragraph (b) of this Section 4.10 shall be deemed Disqualified Stock for purposes of this covenant to have been incurred on covenant; provided, in each such case, that the date such Indebtedness was first incurred until such Indebtedness amount thereof is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)included in Fixed Charges of the Company as accrued.
Appears in 2 contracts
Sources: Indenture (Sun Medical Technologies Inc /Ca/), Indenture (Prime Medical Services Inc /Tx/)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Partnership will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Partnership will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerPartnership’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Partnership and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Partnership and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 150.0 million and (y) the amount 15.0% of the Borrowing Base Consolidated Net Tangible Assets as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of (i) Indebtedness represented of any Person in existence on the date such Person becomes a Restricted Subsidiary as a result of an acquisition by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all Partnership or any part Restricted Subsidiary or (ii) Indebtedness of the purchase pricePartnership or any Restricted Subsidiary incurred to finance the acquisition, construction, development, design or cost improvement of construction or improvement, of property any assets (real or personal), plant or equipment used including Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations, Disqualified Stock, synthetic lease obligations and any Indebtedness assumed in connection with the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock acquisition of any Person owning such assets, in an assets (real or personal) or secured by a Lien on any such assets before the acquisition thereof; provided that the aggregate principal amount, including all Permitted Refinancing amount of Indebtedness incurred to refund, refinance or replace outstanding at any Indebtedness incurred pursuant to time and permitted by this clause (4), ) shall not to exceed, at any time outstanding, exceed the greater of (x) $30.0 140.0 million or and (y) 315% of Consolidated Net Tangible Assets (determined at the time of the Issuerincurrence);
(5) the incurrence by the Issuer Partnership 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses clause (2), (3), (4), (5), (1512), (13) or (1618) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Partnership and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Partnership or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Partnership 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 IssuerPartnership, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 the Issuer Partnership or a Restricted Subsidiary thereofof the Partnership, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Partnership’s Restricted Subsidiaries to the Partnership or to any of its Restricted Subsidiaries of any 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 Partnership or a Restricted Subsidiary of the Partnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Partnership or a Restricted Subsidiary of the Partnership, 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 (7);
(8) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee by the Issuer Partnership or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Partnership or a Restricted Subsidiary of the Issuer Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat 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;
(10) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in connection with one or more standby or trade-related letters of credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations, workers’ compensation claims, health or other types of social security benefits, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, in the case ordinary course of business or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances;
(11) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a Guarantee check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of the Partnership or any Restricted Subsidiary that is incurred in connection with any sale and leaseback transaction, provided the Attributable Debt with respect to all sale and leaseback transactions in the aggregate at any one time outstanding shall not a Guarantor, exceed the greater of (x) $25.0 million and (y) 2.5% of Consolidated Net Tangible Assets (determined at the time of incurrence of such Restricted Subsidiary complies with Section 4.16Attributable Debt);
(913) the incurrence by the Partnership or its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(14) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness arising from agreements of the Partnership or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;
(15) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums;
(16) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness that is contractually subordinated in right of payment to the Notes or to any Note Guarantee in an aggregate principal amount not to exceed at any one time outstanding $25.0 million;
(17) the incurrence by the Partnership or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary of the Partnership or any Joint Venture but only to the extent that such liability is the result of the Partnership’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (17) and then outstanding does not exceed $25.0 million; and
(18) the incurrence by the Partnership or any Guarantor of additional Indebtedness or the issuance by the Partnership of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred or Disqualified Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (18), not to exceed the greater of (x) $75.0 million and (y) 7.5% of Consolidated Net Tangible Assets determined on the date of such incurrence or issuance. The Partnership will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or 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 Partnership or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (18) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Partnership will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, 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 initially be deemed to have been incurred on such date in reliance on the exception provided by Section 4.09(b)(1). The accrual of interestinterest or Preferred Stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Stock or preferred stock in the form of additional shares securities 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Partnership as accrued;
(10) accrued to the incurrence extent required by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing definition of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessterm. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Partnership or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (SunCoke Energy Partners, L.P.), Indenture (SunCoke Energy Partners, L.P.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Suburban Propane will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Suburban Propane will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Suburban Propane may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if the Consolidated Fixed Charge Coverage Ratio for the IssuerSuburban Propane’s most 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 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a10.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Suburban Propane and any Guarantor of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Suburban Propane and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 400.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or Suburban Propane and any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries Issuers of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note GuaranteesInitial Notes;
(4) the incurrence by the Issuer or Indebtedness of Suburban Propane and any of its Restricted Subsidiaries of Indebtedness represented by (including Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Obligations and Acquired Debt) incurred for the purpose making of financing all expenditures for the improvement or any part of repair, to the purchase priceextent the improvements or repairs may be capitalized in accordance with GAAP, or cost additions, including by way of construction or improvementacquisitions of businesses and related assets, to the property and assets of property (real or personal), plant or equipment used in the business of the Issuer or any of Suburban Propane and its Restricted Subsidiaries, whether through including, without limitation, the direct purchase acquisition of assets subject to operating leases or the Capital Stock incurred by assumption in connection with additions, including additions by way of any Person owning such acquisitions or capital contributions of businesses and related assets, in an to the property and assets of Suburban Propane and its Restricted Subsidiaries; provided, that the aggregate principal amount, including all Permitted Refinancing amount of Indebtedness incurred to refund, refinance or replace outstanding at any Indebtedness incurred time pursuant to this clause (4), may not to exceed, exceed $100.0 million at any one time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer or Suburban Propane and any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance refinance, replace, defease or replace discharge, Indebtedness (other than intercompany Indebtedness) that is was permitted by this Supplemental Indenture to be incurred under Section 4.10(a10.10(a) or clauses (2), (3), (4), (5), (15) or (165) of this Section 4.10(b10.10(b);
(6) the incurrence by the Issuer or Suburban Propane and any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Suburban Propane and any of its Restricted Subsidiaries; provided, however, that:
(a) if the an Issuer or any Guarantor is the an obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not an Issuer 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 the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Suburban Propane or a Restricted Subsidiary thereof of Suburban Propane and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Suburban Propane or a Restricted Subsidiary thereofof Suburban Propane, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Suburban Propane or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by the Issuer any of Suburban Propane’s Restricted Subsidiaries to Suburban Propane or to any of its Restricted Subsidiaries of units or 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 Suburban Propane or a Restricted Subsidiary of Suburban Propane; and
(b) any sale or other transfer of any such Preferred Stock to a Person that is not either Suburban Propane or a Restricted Subsidiary of Suburban Propane 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 (7);
(8) the incurrence by Suburban Propane and any of its Restricted Subsidiaries of non-speculative Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Issuers or any of their Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Issuers or a Restricted Subsidiary of the Issuer Issuers that was permitted to be incurred by another provision of this Section 4.1010.10; provided thatprovided, that if the Indebtedness being guaranteed is incurred by one or both of the Issuers and is subordinated to the Notes, then the guarantee of such Indebtedness by any Restricted Subsidiary of the Issuers shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by Suburban Propane or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(11) the incurrence by Suburban Propane or any of its Restricted Subsidiaries of Indebtedness arising from performance bonds, bid bonds, bankers’ acceptances, workers’ compensation, health, disability or other employee benefit claims, surety or appeal bonds, payment obligations in connection with self-insurance or similar obligations and bank overdrafts (and letters of credit in respect thereof) incurred in the ordinary course of business;
(12) the incurrence by Suburban Propane or any of its Restricted Subsidiaries of Indebtedness arising from indemnities or other similar obligations in respect of purchase price adjustments in connection with the disposition of property or assets;
(13) (i) Indebtedness of Suburban Propane or any of its Restricted Subsidiaries acquired after the date hereof and (ii) Indebtedness of any Person merged or consolidated with or into Suburban Propane or any of its Restricted Subsidiaries after the date hereof, which Indebtedness in each case, exists at the time of such acquisition, merger, consolidation or conversion and is not created in contemplation of such event and where such acquisition, merger or consolidation is otherwise permitted by this Supplemental Indenture; provided, that the aggregate principal amount of Indebtedness under this clause (13) shall not at any time exceed $25.0 million; and
(14) the incurrence by Suburban Propane 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, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14), not to exceed $40.0 million. The Issuers will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuers unless such Indebtedness is also contractually subordinated in right of payment to the Notes 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 a first or junior Lien basis. For purposes of determining compliance with this Section 10.10, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) of this Section 10.10, or is entitled to be incurred pursuant to Section 10.10(a), the Issuers will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
10.10; provided, that Indebtedness under Credit Facilities outstanding on the date on which the Initial Notes were originally issued and authenticated under this Supplemental Indenture was deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt and cannot be so reclassified. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided10.10. Notwithstanding any other provision of this Section 10.10, the maximum amount of Indebtedness that Suburban Propane or any Restricted 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 is included in Fixed Charges case of the Issuer as accruedany Indebtedness issued with original issue discount;
(102) the incurrence by the Issuer’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 principal amount of the Issuer that was not permitted by this clause (10);Indebtedness, in the case of any other Indebtedness; and
(113) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon of another Person secured by a Lien on 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements assets of the Issuer or such Restricted Subsidiary providing for indemnificationspecified Person, 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 Issuer 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; provided thatlesser of:
(a) the Fair Market Value of such Indebtedness is not reflected on asset at the balance sheet date of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); determination, and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any amount of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Person.
Appears in 2 contracts
Sources: First Supplemental Indenture (Suburban Propane Partners Lp), First Supplemental Indenture (Suburban Propane Partners Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries of the Company that are Guarantors may incur Indebtedness or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the such additional Indebtedness had been incurred incurred, or such Preferred Stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that . The provisions of the aggregate amount first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or Company and any Restricted Subsidiary that is a Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding pursuant to this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (xA) the Borrowing Base; and (B) $385.0 million and (y) the amount of the Borrowing Base 700,000,000 as of the date of such incurrence, less, in the case of both clause incurrence minus (x1) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, Sales required to be applied that are in fact applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries to repay any permanently Indebtedness outstanding under one or more Credit Facilities (and, in and to reduce commitments with respect thereto if the case of any Indebtedness being repaid is revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunderIndebtedness) pursuant to Section 4.13 4.10 hereof and less(2) the aggregate amount of all repayments, in optional or mandatory, of the case principal of both clause any such additional term Indebtedness (xother than repayments that are concurrently reborrowed) and clause (y), amounts outstanding under any Qualified Receivables Transactionsthat have actually been made since the date hereof;
(2ii) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and related Note the Exchange Notes to be issued pursuant to the Registration Rights Agreement (including, in each case, the Subsidiary Guarantees);
(4iv) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed, in aggregate principal amount at any one time outstanding, the greater of (x) $30.0 million or (y) 35% of Consolidated Tangible Total Assets on a pro forma basis (including a pro forma application of the Issuernet proceeds of that Indebtedness), as if that Indebtedness had been incurred on the date of calculation;
(5v) the incurrence by the Issuer 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 is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (15v) or (16xiii) of this Section 4.10(bparagraph in a substantially concurrent transaction (which incurrence shall be no earlier than 30 days prior to the refunding, refinancing or replacing of the Indebtedness being refunded, refinanced or replaced and the proceeds of the Permitted Refinancing Indebtedness shall be deposited in escrow pending application);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted SubsidiariesWholly Owned Subsidiaries that are Guarantors; provided, however, that:
that (aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 NotesNotes and this Indenture, in the case of the IssuerCompany, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
Guarantor and (b) (iB)(1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof any of its Wholly Owned Subsidiaries that are Guarantors and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, any of its Wholly Owned Subsidiaries that are Guarantors shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, (A) 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 or swapping interest rate, commodity price or (B) hedging exposure to foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderfluctuations;
(8) viii) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9ix) the incurrence of Non-Recourse Debt by the Company's Unrestricted Subsidiaries, 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 (ix);
(x) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock or preferred stock Preferred Stock in the form of additional shares of the same class of Disqualified Stock or preferred stock Preferred Stock, as the case may be, which will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock Preferred Stock, as the case may be, for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10xi) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15xii) the incurrence by a Receivables Subsidiary of Indebtedness that is not recourse to the Company or any other Restricted Subsidiary of the Company (other than with respect to Standard Securitization Undertakings) in connection with a Qualified Receivables Transaction; and
(xiii) the incurrence by the Issuer Company or any Guarantor 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 other Indebtedness incurred pursuant to this clause (15xiii), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business50,000,000. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xiii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09, the Issuer will Company shall be permitted to classify such that item of Indebtedness on the date of its incurrence, and from time to time may reclassify, or reclassify all or a portion of such item of Indebtedness in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities that are in existence on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such that date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1i) of paragraph (b) the definition of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Permitted Debt.
Appears in 2 contracts
Sources: Indenture (Ames Department Stores Inc), Indenture (Ames Department Stores Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the Issuer’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Restricted Subsidiary (whether as borrower or guarantor) of Indebtedness and letters of credit under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (xi) $385.0 million and 3.0 billion, (yii) the amount of the Borrowing Base as and (iii) $500.0 million plus 30.0% of Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries the Guarantors of Indebtedness represented by (a) the Notes to be issued on the date of this Indenture Indenture, (b) the Exchange Notes issued pursuant to any Registration Rights Agreement; and related Note (c) any Guarantees;.
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price, price or other acquisition cost or cost of construction design, construction, installation, development, repair or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted SubsidiariesSubsidiaries (together with improvements, whether through the direct purchase of assets additions, accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or the Capital Stock of discharge any Person owning such assetsIndebtedness incurred pursuant to this clause (4), in an aggregate principal amount, including when taken together with the outstanding amount of all other Indebtedness or Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 350.0 million or and (yb) 35.0% of Adjusted Consolidated Net Tangible Assets determined at the date of the Issuersuch 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 renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) or Disqualified Stock or Preferred Stock that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses clause (2), (3), (4), (5), (15) or (1615) of this Section 4.10(b4.09(b);
(6) 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:
(aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the 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 the Issuer or a Restricted Subsidiary thereofof the Issuer, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any of its Restricted Subsidiaries of any 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 Issuer or a Restricted Subsidiary of the Issuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Issuer or a Restricted Subsidiary of the Issuer, 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 (7);
(8) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee guarantee by the Issuer or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, in then the case of guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed, and if the guarantee is by a Guarantee of any Restricted Subsidiary that is not a Guarantor, the Indebtedness guaranteed could have otherwise been incurred by such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of under this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued4.09;
(10) the incurrence by the Issuer’s Unrestricted Issuer or any of its Restricted Subsidiaries of NonIndebtedness in respect of self-Recourse Debt; providedinsurance obligations or bid, howeverplugging and abandonment, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiaryappeal, such event shall be deemed to constitute an incurrence of Indebtedness by reimbursement, performance, surety and similar bonds and completion guarantees issued or provided by, or for the account of, the Issuer or a Restricted Subsidiary in the ordinary course of business and any guarantee or obligations with respect to letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in arising from the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, 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 with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed is covered within 30 days following such drawing or incurrencefive Business Days;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) the incurrence of any obligation arising from agreements of the Issuer or such any Restricted Subsidiary of the Issuer providing for indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price price, holdbacks, earn outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted SubsidiarySubsidiary in a transaction permitted by this Indenture, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of provided such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness obligation is not reflected on the face of the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that dispositionSubsidiary;
(1314) the issuance pledge of Disqualified Stock (or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer a Guaranty limited in recourse solely to) Equity Interests in an Unrestricted Subsidiary or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being Joint Venture held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance secure Indebtedness of such shares of Disqualified Stock Unrestricted Subsidiary or preferred stock that was not permitted by this clause (13);
(14) Joint Venture and solely to the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or extent such Restricted Subsidiary in the ordinary course of businessIndebtedness constitutes Non-Recourse Debt;
(15) the incurrence by the Issuer or any Guarantor its Restricted Subsidiaries of 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 (15), not to exceed $75.0 millionAcquisition Indebtedness;
(16) the incurrence by the Foreign Issuer or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of and the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;Subsidiaries; and
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary of additional Indebtedness or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence issuance by the Issuer of Indebtedness to effect the repurchase, redemption any Disqualified Stock or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants Restricted Subsidiary of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons Preferred Stock in an aggregate principal amount, when taken together with the outstanding amount at any one time outstanding of all other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (17), not to exceed the maximum amount greater of (i) $350.0 million and (ii) 5.0% of Adjusted Consolidated Net Tangible Assets determined on the date of such acquisitions pursuant incurrence or issuance. Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness or Disqualified Stock or Preferred Stock but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business4.09. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness or Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2217) aboveof this Section 4.09(b), or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer will be permitted to divide, classify and reclassify such item of Indebtedness or Disqualified Stock or Preferred Stock on the date of its incurrenceincurrence or issuance, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness or Disqualified Stock or Preferred Stock, in any manner (including by dividing and classifying such item of Indebtedness or Disqualified Stock or Preferred Stock in more than one type of Indebtedness or Disqualified Stock or Preferred Stock permitted under this Section 4.09) that complies with this Section 4.10 at such time. 4.09; provided that Indebtedness outstanding under Credit Facilities on the Credit Agreement on date of this Indenture shall be considered incurred under clause (1) of this Section 4.09(b) and may not be reclassified. The dollar equivalent principal amount of any Indebtedness denominated in a foreign currency and incurred pursuant to any dollar-denominated restriction on the incurrence of Indebtedness shall be calculated based on the relevant exchange rates in effect at the time of incurrence, 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 Section 4.09, the maximum amount of Indebtedness that the Issuer and the Restricted Subsidiaries may incur pursuant to this Section 4.09 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. The accrual of interest or Preferred Stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness or on the Notes in the form of additional Indebtedness with the same term and the payment of dividends on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified 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 4.09; provided that the amount thereof is included in Fixed Charges of the Issuer as accrued to the extent required by the definition of such term. For purposes of this Section 4.09, (i) the accrual of an obligation to pay a premium in respect of Indebtedness or Disqualified Stock or Preferred Stock arising in connection with the issuance of a notice of redemption or making of a mandatory offer to purchase such Indebtedness or Disqualified Stock or Preferred Stock, and (ii) unrealized losses or charges in respect of Hedging Agreements (including those resulting from the application of FASB ASC Topic No. 815, Derivatives and Hedging) will, in the case of (i) or (ii), not be deemed to be an incurrence of Indebtedness or Disqualified Stock or Preferred Stock. Further, the accounting reclassification of any obligation or Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries as Indebtedness or Disqualified Stock or Preferred Stock will not be deemed an incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock for purposes of this Section 4.09. The “amount” or “principal amount” of any Indebtedness or Preferred Stock or Disqualified Stock outstanding at any time of determination as used herein shall be as set forth below or, if not set forth below, determined in accordance with GAAP:
(A) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(B) the principal amount of the Indebtedness, in the case of any other Indebtedness;
(C) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person;
(D) in the case of any Finance Lease Obligation, the amount determined in accordance with the definition thereof;
(E) in the case of any Preferred Stock, (x) if other than Disqualified Stock, the greater of its voluntary or involuntary liquidation preference and its maximum fixed redemption price or repurchase price or (y) if Disqualified Stock, as specified in the definition thereof;
(F) in the case of any Interest Rate Agreements included in Section 4.09(b), zero;
(G) in the case of all other unconditional obligations, the amount of the liability thereof determined in accordance with GAAP; and
(H) in the case of all other contingent obligations, the maximum liability at such date of such Person. For purposes of determining any particular amount of Indebtedness, (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 Section 4.10(b)(1). Any Indebtedness a Credit Facility and are being treated as incurred under Credit Facilities pursuant to clause (1) of paragraph (bSection 4.09(b) and the letters of this Section 4.10 credit relate to other Indebtedness, then the amount of such other Indebtedness equal to the face amount of such letters of credit 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 shall be deemed for purposes equal to the greater of this covenant to have been incurred on (x) the date principal of such Indebtedness was first incurred until and (y) the amount that may be drawn under such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)letter of credit.
Appears in 2 contracts
Sources: Indenture (Range Resources Corp), Indenture (Range Resources Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Preferred Stock or preferred stockDisqualified Stock; provided, however, that the Issuer and the Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock and the Restricted Subsidiaries may issue preferred stockor Disqualified Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Issuers and any Restricted Subsidiary of additional Indebtedness and letters of credit under one or any Guarantor of Indebtedness under more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 750.0 million and (yii) the amount $400.0 million plus 35% of the Borrowing Base as of Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness or any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture Indenture, any Exchange Notes issued in exchange therefor and related the Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 25.0 million or and (yii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of the Issuersuch incurrence;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses clause (2), (3), (4), (5), (15) or (1611) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Subsidiary 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 IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by any of the Issuer Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurancePreferred Stock; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (iA) any subsequent issuance or transfer of any Equity Securities Interests that results in any such Disqualified Preferred Stock or preferred stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and of the Company; and
(iiB) any sale or other transfer of any such shares of Disqualified Preferred Stock or preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an issuance of such shares of Disqualified Preferred Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (137);
(14) 8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary Hedging Obligations in the ordinary course of business;
(159) the Guarantee by the Issuers or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; 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;
(10) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business; and
(11) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1511), not to exceed the greater of (i) $75.0 million;
million and (16ii) the incurrence by the Foreign Restricted Subsidiaries 5.0% of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability Company’s Adjusted Consolidated Net Tangible Assets determined as of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment date of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessissuance. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2211) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. 4.09; provided that Indebtedness under Credit Facilities outstanding as of the Credit Agreement on date of this Indenture shall after giving effect to the use of proceeds of the initial offering of the Notes will be deemed to have been incurred in reliance on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien 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 payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant Section 4.09; provided that the amount thereof is included in Fixed Charges of the Company as accrued to have been incurred the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date such of determination; and
(2) the amount of the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)of the other Person.
Appears in 2 contracts
Sources: Indenture (Jones Energy, Inc.), Indenture (Jones Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Issuer Company nor any Guarantor (other than Parent) will not issue any Disqualified Stock and the Issuer Company will not permit any of its other Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the Restricted Subsidiaries any Guarantor (other than Parent) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 issued, would have been at least 2.00 2.5 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company and or any Guarantor of additional Indebtedness (including letters of credit) under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Subsidiaries thereunder) not to exceed an amount equal to the greater of (xa) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence400.0 million, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the Issue Date to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a the Credit Facility, to Facilities and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 4.10 hereof and less, in (b) 30% of ACNTA as of the case date of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionssuch incurrence;;
(2) the incurrence by the Issuer Company or any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries of Indebtedness the Guarantors represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and any Exchange Notes and related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (1612) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company 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 then due with respect to the Notes, or any if a Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness neither the Company nor another Guarantor is owed to a Restricted Subsidiary that is not a Guarantorthe obligee, 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 Guarantee of the Issuer, or the Note Guarantee, in the case of a such Guarantor; and
(bB) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer any Guarantor that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the incurrence by the 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 the Company or any of its Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary that is not permitted by this clause (10);
(11) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each other than an obligation for money borrowed);
(12) Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of such Indebtedness pursuant to this clause (12);
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreement of the Company or any of its Restricted Subsidiaries 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 a Subsidiary, provided that the maximum aggregate liability in respect of all such indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and
(14) 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, not to exceed $25.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) of this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this covenant. 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. Indebtedness of any Person existing at the time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Indenture (Energy Xxi (Bermuda) LTD), Indenture (Energy Xxi (Bermuda) LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 to 11.00, 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 the Disqualified Stock or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and the Restricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (xi) $385.0 million and 1,800.0 million, (yii) the amount of the Borrowing Base as at such time, and (iii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the Concurrent Notes to be issued on the date of this Indenture Issue Date, and the related Note Guaranteesguarantees;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance 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, price or other acquisition cost or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 450.0 million or and (yii) 33.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (15) or (1614) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Guarantor, such Indebtedness (excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money)) 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat 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;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business or as required by requirements of law or governmental authorities and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or as required by requirements of law or governmental authorities;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within ten Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business consisting of obligations owed to insurance providers or the financing of insurance premiums;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock 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 or Disqualified Stock issued pursuant to this clause (16), not to exceed, at any one time oustanding, the greater of (i) $650.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) customer deposits and advance payments received in the ordinary course of business or consistent with industry practice from customers for goods and services purchased in the ordinary course of business or consistent with industry practice;
(18) the incurrence of (a) Indebtedness owed to banks and other financial institutions incurred in the ordinary course of business or consistent with industry practice in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries and (b) Indebtedness in respect of or undertaken in connection with Treasury Management Services, including Treasury Management Obligations, in each case, with respect to the Company, any Subsidiaries or any Joint Venture;
(19) the incurrence of Indebtedness by the Company or any Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited with the Trustee to satisfy and discharge the Notes in accordance with this Indenture; and
(a) guarantees incurred in the ordinary course of business or consistent with industry practice in respect of obligations to suppliers, customers, franchisees, lessors, licensees, sub-licensees, and distribution partners and guarantees required by governmental authorities in the ordinary course of business; and (b) the incurrence of any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligation incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture. For purposes of determining compliance with this Section 4.09, in the case event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (20) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under the Credit Agreement outstanding on or prior to the Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interestinterest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock or preferred stock in the form of additional shares securities 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, provided that the amount thereof is shall be included in Fixed Charges of the Issuer Company as accrued;
(10) accrued to the incurrence extent required by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing definition of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 term. The amount of any business, assets or Capital Stock Indebtedness outstanding as of the Issuer 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; provided thatdate will be:
(a) such Indebtedness is not reflected on the balance sheet accreted value of the Issuer or Indebtedness, in the case of any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); andIndebtedness issued with original issue discount;
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any principal amount of the Issuer’s Restricted Subsidiaries issued to Indebtedness, in the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer case of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22c) contingent liabilities arising out in respect of endorsements Indebtedness of checks and another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other negotiable instruments for deposit or collection in the ordinary course of businessPerson. For purposes of determining compliance with this Section 4.10any U.S. dollar-denominated restriction on the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock, the U.S. dollar-equivalent principal amount of Indebtedness, liquidation preference of Disqualified Stock or amount of Preferred Stock denominated in a foreign currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness, Disqualified Stock or Preferred Stock was incurred or issued (or, in the event that any proposed Indebtedness meets the criteria case of more than one of the categories of Permitted Debt described in clauses (1) through (22) aboverevolving credit debt, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first committed or first incurred until (whichever yields the lower U.S. dollar equivalent)); provided that if such Indebtedness is actually repaidincurred or Disqualified Stock or Preferred Stock is issued to refinance other Indebtedness, notwithstanding Disqualified Stock or Preferred Stock, as applicable, 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 will be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness, Disqualified Stock or Preferred Stock does not exceed (1) the principal amount of such Indebtedness, the liquidation preference of such Disqualified Stock or the amount of such Preferred Stock, as applicable, being refinanced, extended, replaced, refunded, renewed or defeased, plus (2) any provisions accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased, plus (3) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness, Preferred Stock or Disqualified Stock and any Credit Facility defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness, Preferred Stock or Disqualified Stock. The principal amount of any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to refinance other Indebtedness, Disqualified Stock or Preferred Stock, if incurred or issued in a different currency from the Indebtedness, Disqualified Stock or Preferred Stock, as applicable, being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness, Disqualified Stock or Preferred Stock is denominated that provide is in effect on the date of such refinancing. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date will be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP. If any Indebtedness is incurred, or Disqualified Stock or Preferred Stock is issued, in reliance on a basket measured by reference to a percentage of Adjusted Consolidated Net Tangible Assets, and any refinancing thereof would cause the percentage of Adjusted Consolidated Net Tangible Assets to be exceeded if calculated based on the Adjusted Consolidated Net Tangible Assets on the date of such refinancing, such percentage of Adjusted Consolidated Net Tangible Assets will not be deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).exceeded to the extent the principal
Appears in 2 contracts
Sources: Indenture (Civitas Resources, Inc.), Indenture (Civitas Resources, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Borrower shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired DebtIndebtedness), and the Issuer will Borrower shall not issue any Disqualified Capital Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any Disqualified Capital Stock or preferred stockany shares of Preferred Stock; provided, however, that the Issuer and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) Indebtedness), issue Disqualified Capital Stock or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio of Opco for the Issuer’s its most 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 Capital Stock or preferred stock Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 Capital Stock or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Notwithstanding Section 4.10(a) will not prohibit 6.01(a), the incurrence of any of the following items of Indebtedness shall be permitted (collectively, “Permitted Debt”):
(1) (A) the incurrence by the Issuer or any Guarantor Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1)(A) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), ) not to exceed $50.0 295.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Loan Agreement (Mattress Firm Holding Corp.), Loan Agreement (Mattress Firm Holding Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company and the Guarantors will not issue any Disqualified Stock and the Issuer Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness (a) Indebtedness, letters of credit and bankers’ acceptances under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding as of any date of incurrence of any such Indebtedness (together with letters the aggregate amount of credit being any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (1)(b) and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Issuer and the Guarantors thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (x) $385.0 1,500.0 million and (y) such amount as would not cause the amount of the Borrowing Base Consolidated Senior Secured Leverage Ratio, calculated as of the date of such incurrence, lessto exceed 3.0 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, in the case of both refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (x1) and was not, as of the date of incurrence of such Permitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (y), the aggregate amount a) above as a result of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsreclassification;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees and the Company’s $800,000,000 7.75% Senior Notes due 2024 and the indenture related thereto and guarantees in respect thereof (in each case, to be issued on the date of this Indenture and related Note GuaranteesIssue Date);
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, Subsidiary (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets), in an aggregate principal amountamount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 300.0 million or and (yb) 34.0% of Consolidated Tangible Total Assets (determined as of the Issuerdate of incurrence);
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1517), (18), (20) or (1626) of this below or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect under Hedging Obligations that are not entered into for the purpose of speculation;
(8) the issuance by any of the Company’s Restricted Subsidiaries to letters the Company or to any of credit issued in the ordinary course its Restricted Subsidiaries of business, including, without limitation, letters shares of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurancepreferred stock; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and of the Company and
(iib) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (13)8);
(149) the incurrence Guarantee by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have Company or a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) Company that was permitted to be incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms another provision of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
Section 4.09 and could have been incurred (19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in 4.09) by the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify Person so Guaranteeing such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).Indebtedness;
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 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 the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of $300.0 million less (xa) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 4.10 hereof and less, in (b) less the case amount of both any Indebtedness of a Receivables Subsidiary outstanding under clause (x13) and clause (y), amounts outstanding under any Qualified Receivables Transactionsbelow;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal), plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, Subsidiaries (whether through the direct purchase acquisition of such assets or the Capital Stock acquisition of Equity Interests of any Person owning such assets), in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred under clause (5) below to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 15.0 million at any time outstanding or (yb) 32.5% of Consolidated Tangible Total Assets (measured at the time of each incurrence of any such Indebtedness and giving pro forma effect to such incurrence and the Issueruse of proceeds thereof);
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (1510) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by any of the Issuer Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurancestock; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and of the Company; and
(iib) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof shall of the Company, will be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (137);
(14) 8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer Hedging Obligations (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1for speculative purposes);
(189) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired guarantee by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer Company or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company or any a Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event Company that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled was permitted to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) by another provision of this Section 4.10 4.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be deemed for purposes of this covenant subordinated or pari passu, as applicable, to have been incurred on the date such same extent as the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).guaranteed;
Appears in 2 contracts
Sources: Indenture (Innophos, Inc.), Indenture (Innophos Investment Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors (if any) may issue preferred stockincur Indebtedness (including Acquired Debt), if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 issued, as the case may be, would have been at least 2.00 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 reimbursement obligations of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the sum of (a) the greater of (xi) $385.0 250.0 million and (yii) the amount of the Borrowing Base as and (b) 7% of the date revolving commitments then in effect thereunder (provided, that all such Indebtedness that is incurred in reliance on this subclause (b) consists solely of such incurrence, less, in the case of both clause (x) protective advances and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied overadvances by the Issuer lenders or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction agent thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors (if any) of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted SubsidiariesSubsidiaries (provided such Indebtedness is incurred prior to or within 180 days after such purchase or completion of such design, whether through the direct purchase of assets construction, installation or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing improvement) and Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (15) or (163) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Indenture Obligations then due with respect to the Notes, in the case of the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (iB) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 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 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 the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee incurrence by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of (a) reimbursement and other customary obligations in connection with Crack Spread Hedging Support LCs issued in an aggregate stated amount, which, when taken together with the aggregate amount of Crack Spread Hedging Cash Collateral (other than any interest and income thereon) that secures obligations of the Company and such Restricted Subsidiaries that are Guarantors under all Permitted Crack Spread Hedge Agreements, does not exceed $50.0 million and (b) Hedging Obligations incurred under any Permitted Crack Spread Hedge Agreement;
(10) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10)guaranteed;
(11) the incurrence or provision by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with (including Guarantees thereof) in respect to letters of credit issued workers’ compensation claims, self-insurance obligations, bankers’ acceptances, indemnity, bid, performance, warranty, release, appeal, surety and similar bonds and completion guarantees in the ordinary course of 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 or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is extinguished within five business days after the Company receives notice of the incurrence thereof;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness to the extent that the net proceeds thereof are immediately deposited to defease the Notes in full or discharge this Indenture, in each case, in accordance with the terms of this Indenture;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for bona fide indemnification, adjustment of purchase price price, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets asset or Capital Stock of the Issuer 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; provided that:
that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of the Issuer or any Restricted Subsidiary of the Company (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that such balance sheet for purposes of this clause (a)); and
and (b) the maximum assumable liability in respect of that any such Indebtedness incurred in connection with a disposition shall at no time exceed the aggregate gross proceeds including non-cash proceeds (the fair market value of those such non-cash proceeds being measured at as determined in good faith by the Company as of the time received and without giving effect to any such subsequent changes in value) actually received by the Issuer and/or that Company and its Restricted Subsidiary in connection with that such disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer Company or any Guarantor of Indebtedness owing to Alon Israel or any of its Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $50.0 million, which Indebtedness by its terms, or by the terms of any agreement or instrument pursuant to which such Indebtedness is incurred;
(A) is expressly made subordinate in right of payment to the prior payment in full in cash of all Indenture Obligations pursuant to the subordination requirements set forth in this Indenture;
(B) provides that no payments of any obligations with respect to such Indebtedness will be required to be made prior to the date that is one year after the final Stated Maturity of the Notes (other than payments of interest that comply with clause (c) below); and
(C) the yield to maturity on such Indebtedness may not exceed 8% per annum.
(16) 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 renew, refund, refinance refinance, replace, defease or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 5.0 million;.
(17c) the incurrence of The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness by a Receivables Subsidiary (including Permitted Debt) that is not recourse 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 Issuer or any other Restricted Subsidiary of Notes and the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee to substantially the same extent; provided, thathowever, the aggregate amount that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);solely by virtue of being unsecured or by virtue of being secured on junior priority basis.
(18d) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2216) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to in reliance on the exception provided by Section 4.10(b)(14.09(b)(1). Any The accrual of interest or preferred stock dividends, the accretion of principal or amortization of original issue discount, the payment of interest on any Indebtedness incurred under Credit Facilities pursuant in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to clause (1) a change in accounting principles, and the payment of paragraph (b) dividends on Disqualified Stock in the form of this Section 4.10 shall additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. The incurrence of an obligation to have been incurred on pay a premium in respect of Indebtedness arising in connection with a notice of redemption or the date making of a mandatory offer to repurchase such Indebtedness was first incurred until such will not be deemed an incurrence of Indebtedness is actually repaidfor purposes of this Section 4.09. Notwithstanding any other provision of this Section 4.09, notwithstanding the maximum amount of Indebtedness that the Company or any provisions under any Credit Facility that provide that such Indebtedness is of its Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values, repaid and reborrowed daily Guarantees or obligations with respect to letters of credit or similar instruments providing support to Indebtedness that is otherwise included in the determination of such amount of Indebtedness shall be excluded from such determination.
(or otherwise periodically)e) 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 the date of determination; and
(B) the amount of the Indebtedness of the other Person that is so secured; and
(4) in the case of a Guarantee that constitutes Indebtedness, the maximum liability under such Guarantee.
Appears in 2 contracts
Sources: Indenture (Alon Refining Krotz Springs, Inc.), Indenture (Alon USA Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) (a) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities (which excludes the Notes issued on the date of and the incurrence by the Guarantors of Guarantees thereof) pursuant to this Indenture 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed $650.0 million less the greater aggregate principal amount of all Indebtedness incurred under clause (xb) $385.0 million and (y) of this paragraph plus the amount of any fees, underwriting discounts, premiums, prepayment penalties and other costs and expenses incurred in connection with extending, refinancing, renewing, replacing or refunding any Credit Facility under which Indebtedness is incurred pursuant to this clause (a), and (b) Indebtedness incurred by a Receivables Entity in a Qualified Receivables Transaction that is not recourse to the Borrowing Base as Company or any of the date of its Restricted Subsidiaries (except for Standard Securitization Undertakings); provided, however, that after giving effect to any such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness indebtedness incurred under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both this clause (xb) and then outstanding does not exceed $650.0 million less the aggregate principal amount of all Indebtedness incurred under clause (y), amounts outstanding under any Qualified Receivables Transactionsa) of this paragraph;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction design, development, construction, installation or improvement, improvement of property (real or personal)personal property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, Subsidiaries (whether through the direct purchase acquisition or otherwise of such assets or the Capital Stock acquisition of Equity Interests of any Person owning such assets), in an aggregate principal amountamount for all Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed the greater of $30.0 million and 2.0% of Total Assets at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2) through (5), (3), (4), (514), (15) or (1617) through (22) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness (other than solely as a result of the creation of a Permitted Lien upon such intercompany Indebtedness) to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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; and
(B) any sale or other transfer of any such preferred stock (other than solely as a result of the creation of a Permitted Lien upon such Equity Interests) to a Person that is not either the Company or a Restricted Subsidiary, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) (i) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided that, in and (ii) the case of guarantee by a Guarantee of any Restricted Subsidiary that is not a Guarantor, such of the Company of Indebtedness of the Company or another Restricted Subsidiary complies with Section 4.16;
(9) of the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness Company incurred in the form of additional Indebtedness accordance with the same terms, and the payment of dividends on 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 or preferred stock for purposes terms of this Section 4.10Indenture; provided, in each such case, that if the amount thereof Indebtedness being guaranteed is included in Fixed Charges of subordinated to or pari passu with the Issuer Notes or any Note Guarantee, then the Guarantee shall be subordinated or pari passu, as accruedapplicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of insurance financing arrangements, take or pay obligations contained in supply agreements, and obligations in respect of, workers’ compensation claims, self-Recourse Debt; providedinsurance obligations, howeverbankers’ acceptances, that if any performance, completion and surety bonds, appeal bonds, completion guarantees and similar obligations, payment obligations in connection with self insurance or similar requirements (including Indebtedness represented by letters of credit for the account of the Company or such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Restricted Subsidiary, such event shall be deemed as the case may be, opened to constitute an incurrence of Indebtedness by a Restricted Subsidiary provide security for any of the Issuer that was not permitted by this clause (10)foregoing) in the ordinary course of business;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days and obligations in connection with netting services;
(12) the incurrence by the Company or of 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 sale or other disposition of any business, assets or Capital Stock of the Company or any Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, whether or not cash, actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(14) the incurrence by a Foreign Subsidiary of additional Indebtedness 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 (14), not to exceed $20.0 million at any time outstanding;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit instruments or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(1216) Indebtedness of the Company or any of its Restricted Subsidiaries to the extent the proceeds thereof are promptly used to redeem the Notes in full or deposited to defease or discharge the Notes, in each case, in accordance with this Indenture;
(17) Indebtedness consisting of Permitted Investments of the kind described in clauses (7) and (8) of the definition thereof;
(18) Indebtedness or Disqualified Stock of a Person incurred and outstanding on or prior to the date on which such Person was acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Disqualified Stock is not incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, such acquisition or merger; and provided, further that, after giving effect to such incurrence of Indebtedness or issuance of Disqualified Stock, the Fixed Charge Coverage Ratio for the Company’s most 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, as the case may be, 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 not be less than such Fixed Charge Coverage Ratio immediately prior to such incurrence or issuance;
(19) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements in connection with the acquisition of all of the Issuer or such Capital Stock of a Person that becomes a Restricted Subsidiary providing for indemnification, adjustment or all or substantially all of purchase price or similar obligationsthe assets of a Person, in each case, incurred or assumed engaged in connection with the disposition of a Permitted Business having an aggregate principal amount at any businessone time outstanding, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of including all Permitted Refinancing Indebtedness incurred by to renew, refund, refinance, replace, defease or discharge any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred incurred pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a19), not to exceed an amount equal to 100% of the net cash proceeds received by the Company from the issuance or sale (other than to a Subsidiary of the Company) of its Capital Stock (other than Disqualified Stock) or as a contribution to the equity capital of the Company (other than as Disqualified Stock), in each case subsequent to August 15, 2007;
(20) Indebtedness of the Company or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to a Credit Facility in a principal amount not in excess of the stated amount of such letter of credit;
(21) to the extent constituting Indebtedness, First Priority Cash Management Obligations; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(1422) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1522), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of Indebtedness or proposed Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer Company (in its sole discretion) will be permitted to divide and classify such item of Indebtedness (or any portion thereof) on the date of its incurrence, and later, from time to time may reclassifytime, reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment or accrual of dividends on Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. 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. Notwithstanding any provision hereof to the contrary, any net cash proceeds, marketable securities or Qualified Proceeds utilized for any Restricted Payment pursuant to clause (b3)(B) of Section 4.07(a), or clauses (2), (5) or (17) of Section 4.07(b), or that are utilized for the incurrence of Indebtedness pursuant to clause (19) of this Section 4.10 4.09, shall not be utilized for any Restricted Payment or incurrence of Indebtedness under the other provisions referred to in this sentence. Furthermore, any net cash proceeds utilized for any redemption of Notes pursuant to Section 3.07(a) shall be deemed for purposes excluded from, and such net cash proceeds shall not include the net cash proceeds utilized to incur indebtedness under, Section 4.09(b)(19). The amount of this covenant to have been incurred on any Indebtedness outstanding as of any date will be:
(1) the date such accreted value of the Indebtedness, in the case of any Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily issued with original issue discount;
(or otherwise periodically).2) the principal amoun
Appears in 2 contracts
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Parent shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will Parent shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Parent’s Fixed Charge Coverage Ratio for the Issuer’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 1.1 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.08(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company and the Parent of the Notes and Note Guarantees (including any PIK or any Guarantor increase in the principal amount of any Note as a result of any PIK Payments) and any Permitted Refinancing Indebtedness under Credit Facilities that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (and 1);
(2) the incurrence by the Guarantors Parent or any of Guarantees thereofits Restricted Subsidiaries of the Existing Indebtedness, the Existing Notes and any Indebtedness that is incurred pursuant to or in lieu of a commitment in existence as of the Closing Date;
(3) the incurrence by the Parent or any of its Restricted Subsidiaries of (a) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (3) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Parent and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 million and 21.0 billion or (yii) the amount 40% of the Borrowing Base as Consolidated Tangible Assets of the date Parent and its Restricted Subsidiaries (calculated at the time of such incurrence, less, in the case of both clause (x) and clause (y), b) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities secured on a junior priority basis by some or all of the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any collateral securing Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both contemplated by clause (xa) and of this clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) in an aggregate principal amount at any one time outstanding under this clause (3)(b) (with letters of credit being deemed to have a principal amount equal to the incurrence by maximum potential liability of the Issuer Parent and its Restricted Subsidiaries of Indebtedness represented by the Notes thereunder) not to be issued on the date of this Indenture and related Note Guaranteesexceed $4.0 billion;
(4) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capital (including Finance Lease Obligations, mortgage financings or financings, purchase money obligations, in each case, obligations and government bond financings) incurred for to finance (or to reimburse the purpose Parent or any of financing its Restricted Subsidiaries for) all or any part of the purchase price, price or cost of construction use, design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment (including without limitation (and in each case, whether or not owned by the Parent or its Restricted Subsidiaries) Aircraft Related Facilities or Aircraft Related Equipment) used in the business of the Issuer Parent or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of (A) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.08(a) hereof or clauses clause (2), (3), (4), (5), (156), (13), (20), (21), (24) or (1625) of this Section 4.10(b4.08(b) and (B) Permitted Refinancing Indebtedness secured by Aircraft Related Equipment or other assets replacing, renewing, refunding, extending, refinancing, defeasing or discharging any other Indebtedness of the Parent or any of its Restricted Subsidiaries that was secured by Aircraft Related Equipment or other assets; including, in the case of both clauses (a) and (b), the incurrence (including by way of assumption, merger or co-obligation) by one or more of the Parent and its Restricted Subsidiaries of Indebtedness of any other Restricted Subsidiaries in connection with, or in contemplation of, a spin-off of such other Restricted Subsidiary;
(6) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness, Disqualified Stock or preferred stock (including Acquired Debt) (A) as part of, or to finance, the acquisition (including by way of merger) of any Permitted Business, (B) incurred in connection with, or as a result of, the merger, consolidation or amalgamation of any Person (including the Parent or any of its Restricted Subsidiaries) that owns a Permitted Business with or into the Parent or a Restricted Subsidiary of the Parent, or into which the Parent or a Restricted Subsidiary of the Parent is merged, consolidated or amalgamated, or (C) that is an outstanding obligation or commitment to enter into an obligation of a Person that owns a Permitted Business at the time that such Person is acquired by the Parent or a Restricted Subsidiary of the Parent and becomes a Restricted Subsidiary of the Parent;
(7) the incurrence by the Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and Parent and/or any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(78) the issuance by any Restricted Subsidiary of the Parent to the Parent or to any of its Restricted Subsidiaries of shares of preferred stock;
(9) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course Ordinary Course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderBusiness;
(8) 10) the Guarantee (including by way of co-obligation or assumption) by the Issuer Parent or any Restricted Subsidiary of the Parent of Indebtedness of the Issuer Parent or a Restricted Subsidiary of the Issuer Parent (including in connection with or in contemplation of a spin-off of the original obligor of the guaranteed or assumed Indebtedness) to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.08; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock extent as the Indebtedness guaranteed or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10)assumed;
(11) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness constituting or 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 claims, self-insuranceinsurance obligations (including reinsurance), or bankers’ acceptances, performance bonds and surety bonds in the Ordinary Course of Business (including without limitation in respect of customs obligations, landing fees, taxes, airport charges, overfly rights and any other Indebtedness with respect obligations to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceairport and governmental authorities);
(12) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;
(13) Indebtedness (a) constituting credit support or financing from aircraft or engine or parts manufacturers or their affiliates or (b) incurred to finance or refinance Aircraft Related Equipment or other operating assets (including, without limitation, to reimburse the Parent or any of its Restricted Subsidiaries for the acquisition cost of any of the foregoing, to finance any pre-delivery, progress or similar payment or pursuant to a sale and lease-back) (whether in advance of or at any time following any acquisition of items being financed, and whether such Indebtedness is unsecured in whole or in part or is secured by such items or by other items or by any combination); provided that the principal amount of such Indebtedness incurred in reliance on subsection (b) of this clause (13), at the time of incurrence of such Indebtedness, may exceed the aggregate incurred and anticipated costs to finance acquisition of the item or items being financed by such Indebtedness (calculated at the time of incurrence of such Indebtedness and determined in good faith by an Officer of the Parent or Restricted Subsidiary, as applicable, (including reasonable estimates of anticipated costs) and calculated to include, without limitation, purchase price, fees, expenses, repayment of any pre-delivery financing and related interest expense (whether or not capitalized) and premium (if any), delivery and late charges and other costs associated with such acquisition (as so calculated, for purposes of this proviso, the “financing costs”)) but, if such principal amount exceeds such financing costs, it may not exceed the aggregate Fair Market Value of the item or items securing such Indebtedness (which Fair Market Value may, at the time of an advance commitment, be determined to be the Fair Market Value at the time of such commitment or (at the option of the issuer of such Indebtedness) the Fair Market Value projected for the time of incurrence of such Indebtedness);
(14) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates (a) to purchase or redeem Capital Stock of the Parent issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $30.0 million in any twelve-month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Parent;
(15) reimbursement obligations in respect of standby or documentary letters of credit or banker’s acceptances;
(16) surety and appeal bonds that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Parent or any of its Restricted Subsidiaries to Credit Card, travel charge or clearing house processors in connection with Credit Card processing, travel charge or clearing house services incurred in the Ordinary Course of Business, whether in the form of hold-backs or otherwise;
(18) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Parent or to any other Restricted Subsidiary of the Parent or their assets (other than such Receivables Subsidiary and its assets and, as to the Parent or any other Restricted Subsidiary of the Parent, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Parent or any of its Restricted Subsidiaries owed to one or more Persons in connection with the financing of insurance premiums in the Ordinary Course of Business;
(20) Indebtedness in respect of or in connection with tax-exempt or tax-advantaged municipal bond and similar financings related to Aircraft Related Facilities;
(21) Credit Card purchases of fuel;
(22) Indebtedness arising from agreements of the Issuer Parent or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected on , in the balance sheet case of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) disposition, the maximum assumable liability in respect of that all such Indebtedness shall at no time exceed the gross proceeds proceeds, including non-cash proceeds (the fair market value Fair Market Value of those such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Parent or any of its Restricted Subsidiary Subsidiaries in connection with that such disposition;
(1323) Indebtedness of the issuance of Disqualified Stock Parent or preferred stock by any of the Issuer’s its Restricted Subsidiaries issued to consisting of take-or-pay or like obligations contained in supply, maintenance, repair, power-by-the-hour, overhaul or like agreements either (A) entered into in the Issuer Ordinary Course of Business or another Restricted Subsidiary; provided that (iB) any subsequent issuance otherwise customary, typical or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by appropriate for a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Permitted Business;
(1424) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of obligations additional Indebtedness that is either (A) unsecured and expressly contractually subordinated in respect right of performance payment to the prior payment in full in cash of all Note Obligations on terms not materially less favorable to the Holders of the Notes than those customary at the time of incurrence (determined in good faith by a senior financial officer of the Parent) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu in right of payment with all Note Obligations and surety bonds convertible into common stock of the Parent; provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (A) and completion Guarantees provided by the Issuer (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or such Restricted Subsidiary in the ordinary course of business;discharge any Indebtedness incurred pursuant to this clause (24), does not exceed $1.5 billion at any time outstanding; and
(1525) the incurrence by the Issuer Parent or any Guarantor 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness incurred pursuant to this clause (1625), not to exceed $50.0 million;3.0 billion, at any time outstanding.
(17c) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.08, in the event that any proposed if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described set forth in clauses (1) through (2225) above, of Section 4.08(b) hereof or is entitled to be incurred pursuant to Section 4.10(a)4.08(a) hereof, the Issuer will Parent shall be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. 4.08; provided that the term “Existing Indebtedness” shall not include any Indebtedness under the Credit Agreement on date of this Indenture shall that is permitted to be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph or (b3) of this the definition of Permitted Debt. Additionally, all or any portion of any item of Indebtedness may later be reclassified as having been incurred pursuant to Section 4.10 4.08(a) hereof or under any category of Permitted Debt described in clauses (1) through (25) of Section 4.08(b) so long as such item (or portion) of Indebtedness is permitted to be incurred pursuant to such provision at the time of reclassification.
(d) None of the following shall be deemed constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant Section 4.08:
(1) the accrual of interest or preferred stock dividends;
(2) the accretion or amortization of original issue discount;
(3) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;
(4) the reclassification of preferred stock or any other instrument or transaction as Indebtedness due to have been incurred a change in accounting principles or in GAAP; and
(5) the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Parent or any provisions under any Credit Facility that provide that such Indebtedness is deemed of its Restricted Subsidiaries may incur pursuant to be borrowed, repaid and reborrowed daily (or otherwise periodically).this Section 4.08 sh
Appears in 2 contracts
Sources: Indenture (American Airlines, Inc.), Indenture (American Airlines, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Unsecured Notes Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) above will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities by the Company or any Restricted Subsidiary up to an aggregate principal amount equal to the greater of (i) of $275.0 million and (ii) 7.0% of Total Tangible Assets at any time outstanding; provided, however, that the maximum amount permitted to be outstanding under this clause (1) shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent the incurrence of such additional Indebtedness is permitted pursuant to any of the other provisions under this Section 4.09;
(2) the incurrence by the Guarantors Company and its Restricted Subsidiaries of Guarantees thereofExisting Indebtedness;
(3) the incurrence by the Company and any Restricted Subsidiary of Indebtedness represented by letters of credit in an aggregate principal amount at any one time outstanding not to exceed the greater of $25.0 million or 5% of Total Tangible Assets (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guaranteesthereunder);
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries and the Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Note Guarantees;
(5) the incurrence by the Company or any Restricted Subsidiary of Indebtedness represented by Attributable Debt, 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, lease expense, rental payments or cost of construction design, construction, installation or improvement, improvement of property (real or personalincluding Vessels), plant or equipment or other assets (including Capital Stock) used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness Indebtedness, incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4Section 4.09(b)(5), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 100.0 million or and (yii) 32.5% of Consolidated Total Tangible Assets at any time outstanding (it being understood that any such Indebtedness may be incurred after the acquisition, purchase, charter or leasing or the construction, installation or the making of any improvement with respect to any asset (including Vessels)); provided that the principal amount of any Indebtedness permitted under this Section 4.09(b)(5) did not in each case at the time of incurrence exceed (i) in the case of a completed Vessel, the Fair Market Value and (ii) in the case of an uncompleted Vessel, 80% of the Issuercontract price for the acquisition of such Vessel, as determined on the date on which the agreement for construction of such Vessel was entered into by the Company or its Restricted Subsidiary, plus any other Ready for Sea Cost of such Vessel;
(56) the incurrence by the Issuer Company, any Unsecured Notes Guarantor or any ▇▇▇▇▇ Act Compliant Entity of its Restricted Subsidiaries Indebtedness in connection with New Vessel Financings in an aggregate principal amount at any one time outstanding not exceeding the New Vessel Aggregate Secured Debt Cap as calculated on the date of the relevant incurrence under this Section 4.09(b)(6);
(7) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (15Sections 4.09(b)(2) or (16b)(4) of hereof or this Section 4.10(b4.09(b)(7);
(68) Indebtedness or Disqualified Stock of the Company and Indebtedness or Disqualified Stock or preferred stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Company since the Issue Date from the issue or sale of Equity Interests of the Company or cash contributed to the capital of the Company (in each case, other than proceeds of Disqualified Stock or preferred stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with Section 4.07(a)(4)(c)(ii) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(b) or to make Permitted Investments (other than Permitted Investments specified in clause (3) of the definition thereof);
(9) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer and Company or any of its Restricted SubsidiariesSubsidiary; provided, however, provided that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Issuer or a Guarantor, such Indebtedness must be unsecured and ((i) except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries and (ii) only to the extent legally permitted (the Company and its Restricted Subsidiaries having completed all procedures required in the reasonable judgment of directors of officers of the obligee or obligor to protect such Persons from any penalty or civil or criminal liability in connection with the subordination of such Indebtedness)) 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.09(b)(9);
(710) the incurrence issuance by any Restricted Subsidiary to the Issuer Company or to any of its Restricted Subsidiaries of preferred stock; provided 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; 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, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this Section 4.09(b)(10);
(11) the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 12) the Guarantee by the Issuer Company or any Restricted Subsidiary Unsecured Notes Guarantor of Indebtedness of the Issuer Company, any Unsecured Notes Guarantor or a Restricted Subsidiary of any ▇▇▇▇▇ Act Compliant Entity to the Issuer extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or a Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (i) in respect of workers’ compensation claims, self-insurance obligations, captive insurance companies, bankers’ acceptances, performance and surety bonds in the ordinary course of business; (ii) in respect of letters of credit, surety, performance or appeal bonds, completion guarantees, judgment, advance payment, customs, VAT or other tax guarantees or similar instruments issued in the ordinary course of business of such Person or consistent with industry practice (including as required by any governmental authority) and not in connection with the borrowing of money, including letters of credit or similar instruments in respect of self-insurance and workers compensation obligations; provided, however, that upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; (iii) 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 30 days; and (iii) consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply agreements, in each case, in the case ordinary course of business;
(14) Indebtedness of any Person outstanding on the date on which such Person becomes a Guarantee Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the Company or any Restricted Subsidiary that is not (other than Indebtedness Incurred to provide all or any portion of the funds used to consummate the transaction or series of related transactions pursuant to which such Person became a Guarantor, such Restricted Subsidiary complies or was otherwise acquired by the Company or a Restricted Subsidiary); provided, however, with respect to this Section 4.164.09(b)(14), that at the time of the acquisition or other transaction pursuant to which such Indebtedness was deemed to be incurred the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof after giving effect to the incurrence of such Indebtedness pursuant to this Section 4.09(b)(14);
(915) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for customary indemnification, obligations in respect of earnouts or other adjustments of purchase price or, in each case, similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets or Person or any Equity Interests of a Subsidiary, provided that the maximum liability of the Company and its Restricted Subsidiaries in respect of all such Indebtedness shall at no time exceed the gross proceeds, including the Fair Market Value of non-cash proceeds (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;
(16) the incurrence by the Company or any Restricted Subsidiary of Indebtedness in the form of Unearned Customer Deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(17) Indebtedness of the Company or any Restricted Subsidiary incurred in connection with credit card processing arrangements entered into in the ordinary course of business;
(18) the incurrence by the Company or any Restricted Subsidiary of Indebtedness to finance the replacement (through construction or acquisition) of a Vessel upon the total loss, destruction, condemnation, confiscation, requisition, seizure or forfeiture of, or other taking of title or use of, such Vessel (collectively, a “Total Loss”) in an aggregate amount no greater than the Ready for Sea Cost for such replacement Vessel, in each case less all compensation, damages and other payments (including insurance proceeds other than in respect of business interruption insurance) received by the Company or any of its Restricted Subsidiaries from any Person in connection with such Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to such Total Loss and any costs and expenses incurred by the Company or any of its Restricted Subsidiaries in connection with such Total Loss;
(19) the incurrence by the Company or any Restricted Subsidiary of Indebtedness in relation to (i) regular maintenance required on any of the Vessels owned or chartered by the Company or any of its Restricted Subsidiaries, and (ii) any expenditures that are, or are reasonably expected to be, recoverable from insurance on such Vessels; and
(20) the incurrence of Indebtedness or the issuance of Disqualified Stock by the Company or any Restricted Subsidiary in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (20), not to exceed the greater of (i) $100.0 million and (ii) 2.5% of Total Tangible Assets (it being understood that Indebtedness incurred pursuant to this clause (20) shall cease to be deemed incurred or outstanding for purposes of this clause (20) but shall be deemed to be incurred or issued for purposes of the first paragraph of this covenant from and after the first date on which the Company or the Restricted Subsidiary, as the case may be, could have incurred such Indebtedness under Section 4.09(a) hereof without reliance on this clause (20)).
(c) Neither the Issuer nor any Guarantor will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuer 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 Issuer or any Guarantor solely by virtue of being unsecured.
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Section 4.09(b)(1) through Section 4.09(b)(20) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company, in its sole discretion, will be permitted to classify such item of Indebtedness on the date of its incurrence and only be required to include the amount and type of such Indebtedness in one of such clauses and will be permitted on the date of such incurrence to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 4.09(a) and Section 4.09(b) hereof and from time to time to reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.
(e) The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).sa
Appears in 2 contracts
Sources: Indenture (Viking Holdings LTD), Indenture (Viking Holdings LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries Subsidiary to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any Guarantor may incur Indebtedness or issue Disqualified Stock and the Restricted Subsidiaries any Foreign Subsidiary may issue preferred stockincur Indebtedness, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, 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 preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of Disqualified Stock, as set forth below (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiary of Indebtedness under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunderi) not to exceed an amount equal to (x) $760.0 million, plus (y) an amount not in excess of (i) the greater of (x) $385.0 500.0 million and (y) 100% of Adjusted EBITDA for the period of four fiscal quarters of the Company most recently ended prior to the calculation of such amount for which annual or quarterly financial statements, as applicable, have been delivered under Section 4.03 calculated, if the applicable Indebtedness is being incurred to finance an acquisition permitted under this Indenture, on a pro forma basis in a manner consistent with the definition of “Fixed Charge Coverage Ratio,” minus (ii) the aggregate principal amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause all Indebtedness previously incurred pursuant to this subclause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor Restricted Subsidiary to repay any Indebtedness under the Credit Facilities (Agreement and, in if the case of any Indebtedness repaid is revolving credit Indebtedness under a Credit FacilityIndebtedness, to effect a corresponding commitment reduction thereunder) correspondingly reduce commitments with respect thereto, pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10;
(2ii) the incurrence by the Issuer or Company and any Guarantors Restricted Subsidiary of the Existing Indebtedness;
(3iii) the incurrence by the Issuer and its Restricted Subsidiaries Company of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and related Note Guaranteesany Guarantees thereof by any Guarantor;
(4iv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4iv), not to exceedexceed the greater of (i) $100.0 million and (ii) 3.5% Consolidated Tangible Assets, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer Company or any of its the 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 was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2ii), (3), (4), (5), (15iii) or (16v) of this Section 4.10(b4.09(b);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(a1) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b2) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or for hedging foreign currency exchange rate risk (or risk, in each case to reverse or amend any such agreements previously made for such purposes), the extent the Hedging Obligations are incurred in the ordinary course of the Company’s financial management and not for any speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderpurpose;
(8) viii) the Guarantee by the Issuer Company or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9ix) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10x) the incurrence by the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if Company or 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 Issuer that was not permitted Indebtedness, including Indebtedness represented by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in for the ordinary course account of businessthe Company or any Restricted Subsidiary, including, without limitation, letters of credit incurred in respect of workers’ compensation claims or claims, self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar insurance obligations, in each caseperformance, incurred or assumed in connection with the disposition of any businessproposal, assets or Capital Stock of the Issuer or a Restricted Subsidiarycompletion, 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements surety and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety similar bonds and completion Guarantees guarantees provided by the Issuer Company or such any Restricted Subsidiary in the ordinary course of business; provided that the underlying obligation to perform is that of the Company or the Restricted Subsidiaries and not that of the Company’s Unrestricted Subsidiaries; provided, further, that such underlying obligation is not in respect of borrowed money;
(15xi) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary 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 (15xi), not to exceed $75.0 125.0 million;
(16xii) the incurrence by the Foreign Company or any Restricted Subsidiaries Subsidiary of the Issuer of Indebtedness, including but not limited to Indebtedness in an aggregate principal amount at any one time outstanding (with represented by letters of credit for the account of the Company or any Restricted Subsidiary, 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 business, assets or Equity Interests 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 Equity Interests for the purpose of financing such acquisition;
(xiii) the incurrence by the Company or any Restricted Subsidiary of 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 that such Indebtedness is extinguished within five (5) Business Days of incurrence;
(xiv) the issuance of preferred stock of a Restricted Subsidiary to the Company that is pledged to secure the Credit Agreement and/or the Notes, provided that any subsequent transfer that results in such preferred stock being held by a Person other than the Company or a Restricted Subsidiary will be deemed to have a principal amount equal to the maximum potential liability constitute an issuance of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to preferred stock not permitted by this clause (16xiv), not to exceed $50.0 million;
(17xv) the incurrence of Acquired Debt (but not any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with, or in contemplation of such other Person merging with or into, or becoming a Qualified Receivables TransactionSubsidiary of, the Company); provided, thathowever, that on the aggregate amount of Indebtedness under this clause (17)date such Person becomes a Subsidiary or is acquired by the Company and after giving pro forma effect thereto, when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) the Company would have been entitled to incur at least $1.00 of additional Indebtedness pursuant to the Issuer or a Restricted Subsidiary incurred to finance an acquisition Fixed Charge Coverage Ratio test in Section 4.09(a) or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than such ratio for the Fixed Charge Coverage Ratio Company and the Restricted Subsidiaries immediately prior to such transaction;
(19xvi) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence Guarantees by the Issuer Company or any Restricted Subsidiary of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Unrestricted Subsidiary, provided that the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum principal amount of such acquisitions pursuant to Section 4.11(b)(5);Guarantees of Indebtedness of any Unrestricted Subsidiary shall not exceed the greater of (i) $75.0 million and (ii) 2.5% of Consolidated Tangible Assets, at any time outstanding; and
(21xvii) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction.
(c) For purposes of determining compliance with any restriction on the incurrence of Indebtedness of where the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to Indebtedness incurred is not denominated in U.S. dollars, the Credit Agreement in a principal amount not in excess of the stated amount of such letter Indebtedness will be the U.S. Dollar Equivalent determined on the date of creditincurrence of such Indebtedness; andprovided, however, that if any such Indebtedness not denominated in U.S. dollars is subject to a Hedging Obligation with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Hedging Obligation. The principal amount of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Hedging Obligation, in which case the Permitted Refinancing Indebtedness shall be determined in accordance with the preceding sentence, and (ii) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess shall be determined on the date such Permitted Refinancing Indebtedness is incurred.
(22d) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xvii) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer will Company shall be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred in reliance on the date exception provided in Section 4.09(b)(i) hereof.
(e) The Company shall not, and shall not permit any 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 Indebtedness was first incurred until Guarantor unless such Indebtedness is actually repaidalso contractually subordinated in right of payment to the Notes or such Note Guarantee on substantially identical terms; provided, notwithstanding however, that no Indebtedness of the Company or any provisions under any Credit Facility that provide that such Indebtedness is Guarantor will be deemed to be borrowed, repaid and reborrowed daily (contractually subordinated in right of payment to any other Indebtedness of the Company or otherwise periodically)any Guarantor solely by virtue of being unsecured or by virtue of the fact that the holders of secured Indebtedness have entered into intercreditor arrangements giving one or more of such holders priority over the other holders in the collateral held by them.
Appears in 2 contracts
Sources: Indenture (Geo Group Inc), Indenture (Geo Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Issuers shall not, and shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Issuer will Issuers shall not issue any Disqualified Stock and the Issuer will shall not permit any of its their Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock or preferred stock if (i) no Default or Event of Default shall have occurred and be continuing at the time of or as consequence of the incurrence of any such Indebtedness or the issuance of any such Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if (ii) the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred 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, however, that . The provisions of the aggregate amount first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.9 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities Company (and the incurrence guarantee thereof by the Guarantors Guarantors) of Guarantees thereof) in an Indebtedness and letters of credit under one or more Senior Credit Facilities; provided that the aggregate principal amount at any one time outstanding of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) outstanding under all Senior Credit Facilities after giving effect to such incurrence does not exceed an amount equal to exceed the greater of (x) $385.0 275.0 million less the aggregate amount of all repayments of any term Indebtedness and all commitment reductions of any revolving Indebtedness, in each case, under one or more Senior Credit Facilities pursuant to clause (i) of the third paragraph of the covenant described in Section 4.10 hereof and (y) the amount of the Company's Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsBase;
(2ii) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries Issuers of Indebtedness represented by the Notes and the Guarantees thereof by the Guarantors in an aggregate principal amount of $110.0 million outstanding on the date of this Indenture;
(iii) the incurrence by a Restricted Subsidiary that is a Foreign Subsidiary and is not a Guarantor of the Notes in an amount at any one time outstanding that does not exceed (x) $3.0 million plus (y) the Borrowing Base of such Restricted Subsidiary; provided, that none of the Company or any other such Restricted Subsidiary shall be obligated, directly or indirectly, to be issued pay principal, premium, interest or other amounts thereon or in respect thereof (including by way of net worth requirements, equity keepwells, etc.);
(iv) the incurrence by the Company and its Subsidiaries of other Indebtedness outstanding on the date of this Indenture and related Note Guaranteesfor so long as such Indebtedness remains outstanding;
(4v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital (including Capitalized Lease Obligations) to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, ) in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount outstanding not to exceed, at any time outstanding, exceed the greater of (x) $30.0 10.0 million or and (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Indenture (Alliance Laundry Holdings LLC), Indenture (Alliance Laundry Holdings LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company and the Guarantors will not issue any Disqualified Stock and the Issuer Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness (a) Indebtedness, letters of credit and bankers’ acceptances under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding as of any date of incurrence of any such Indebtedness (together with letters the aggregate amount of credit being any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (1)(b) and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Issuer and the Guarantors thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (x) $385.0 1,500.0 million and (y) such amount as would not cause the amount of the Borrowing Base Consolidated Senior Secured Leverage Ratio, calculated as of the date of such incurrence, lessto exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, in the case of both refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (x1) and was not, as of the date of incurrence of such Permitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (y), the aggregate amount a) above as a result of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsreclassification;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, Subsidiary (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets), in an aggregate principal amountamount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 300.0 million or and (yb) 34.0% of Consolidated Tangible Total Assets (determined as of the Issuerdate of incurrence);
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1517), (18), (20), (26) or (1627) of this below or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(b) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are incurred in the ordinary course of business not entered into for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderspeculation;
(8) the Guarantee issuance by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer 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 Issuer 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 (8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.10; provided that4.09 and could have been incurred (in compliance with this Section 4.09) by the Person so Guaranteeing such Indebtedness;
(10) the incurrence of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(11) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self- insurance, health, disability or other employee benefits or property, casualty or liability insurance provided to the Company or any of its Restricted Subsidiaries, bankers’ acceptances, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business; provided that the underlying obligation to perform is that of the Company and its Restricted Subsidiaries and not that of the Company’s Unrestricted Subsidiaries; and provided further that such underlying obligation is not in respect of borrowed money;
(12) the incurrence of Indebtedness that may be deemed to arise as a Guarantee result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn-out or similar Obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Company or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary; provided that (a) any amount of such Obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary shall not be permitted under this clause (12) and (b) the maximum aggregate liability in respect of all such Obligations outstanding under this clause (12) shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;
(13) Indebtedness incurred under commercial letters of credit issued for the account of the Company or any of its Restricted Subsidiaries in the ordinary course of business (and not for the purpose of, directly or indirectly, incurring Indebtedness or providing credit support or a similar arrangement in respect of Indebtedness); or Indebtedness of the Company or any of its Restricted Subsidiaries under letters of credit and bank guarantees backstopped by letters of credit under the Credit Facilities;
(14) pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licenses, contractors, franchisees or customers of obligations, other than Indebtedness, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to directors, officers or employees of the Company or any of its Restricted Subsidiaries in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the notes, is not secured by any assets of the Company or any of its Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the notes, in an aggregate principal amount at any time outstanding not to exceed $25.0 million;
(16) the Ralcorp Obligations;
(17) the incurrence by any Foreign Subsidiary of Indebtedness and/or the guarantee by the Company and/or any of its Restricted Subsidiaries of such Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (17), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (17), not to exceed the greater of (a) $275.0 million and (b) 3.0% of Consolidated Total Assets (determined as of the date of incurrence);
(18) the incurrence by the Company or any of its Restricted Subsidiaries of any Capitalized Lease Obligation resulting from a Sale and Leaseback Transaction in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (18), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (18), not to exceed the greater of $100.0 million and 1.25% of Consolidated Total Assets (determined as of the date of incurrence);
(19) Indebtedness in respect of Receivables Program Obligations;
(20) the incurrence of Acquired Debt or other Indebtedness incurred in connection with, or in contemplation of, an acquisition (including by way of merger or consolidation) by the Company or any of its Restricted Subsidiaries; provided that after giving pro forma effect to such acquisition, either (a) the Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the net proceeds therefrom) would be at least 2.0 to 1.0 or (b) the Company’s pro forma Fixed Charge Coverage Ratio would be greater than the actual Fixed Charge Coverage Ratio of the Company immediately prior to such acquisition and incurrence;
(21) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes;
(22) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(23) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(24) Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(25) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;
(26) the incurrence of Indebtedness by any Restricted Subsidiary of the Company that is not a Guarantor, and/or the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of any joint venture of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (26), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (26), not to exceed the greater of $275.0 million and 3.0% of Consolidated Total Assets (determined as of the date of incurrence); and
(27) 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, as of the date of incurrence of any Indebtedness pursuant to this clause (27), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (27), not to exceed the greater of $400.0 million and 4.5% of Consolidated Total Assets (determined as of the date of incurrence). The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in the right of payment to the Notes and the applicable Subsidiary Guarantee on substantially the same terms. For purposes of the foregoing, no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of being unsecured or secured by a junior priority Lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them, including intercreditor agreements that contain customary provisions requiring turnover by holders of junior priority Liens of proceeds of collateral in the event that the security interests in favor of the holders of the senior priority in such intended collateral are not perfected or invalidated and similar customary provisions protecting the holders of senior priority Liens. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (27) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this Section 4.16;
(9) 4.09. In addition, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 treated as an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).Inde
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly or directly liable, contingently or otherwise, with respect to (collectively, collectively “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the any Restricted Subsidiaries Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the any Restricted Subsidiaries Subsidiary that is a Guarantor may issue preferred stock, Preferred Stock if the Fixed Charge Coverage Ratio for the Issuer’s most 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 Preferred Stock or preferred stock is issued would have been at least 2.00 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Coverage Ratio Exception”), as if the additional Indebtedness had been incurred Disqualified or the Preferred Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor existence of Indebtedness under the Credit Facilities (Agreement together with the incurrence of the guarantees thereunder and the incurrence by the Guarantors issuance and creation of Guarantees thereof) in an aggregate principal amount at any one time outstanding letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the maximum potential liability face amount thereof), up to an aggregate principal amount, together with amounts outstanding under a Qualified Securitization Financing incurred pursuant to clause (17) below, of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 1,550.0 million and (y) outstanding at any one time, less the amount of all mandatory principal payments (with respect to revolving borrowings and letters of credit, only to the Borrowing Base as extent revolving commitments are correspondingly reduced) actually made by the borrower thereunder in respect of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Indebtedness thereunder with Net Proceeds of from Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any and the Guarantors of Indebtedness represented by the Existing IndebtednessSecurities (including any Guarantee) issued on the Issue Date;
(3) the incurrence by the Issuer Existing Indebtedness (other than Indebtedness described in clauses (1) and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date (2) of this Indenture and related Note GuaranteesSection 4.10(b));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsSubsidiary to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment that is used or useful in the business of the Issuer or any of its Restricted Subsidiaries, a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, ) in an aggregate principal amountamount that, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to refund, refinance or replace any Indebtedness then outstanding and incurred pursuant to this clause (4), does not to exceed, at any time outstanding, exceed the greater of (x) $30.0 50.0 million or and (y) 34.0% of Consolidated Tangible Assets of the IssuerAssets;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, including without limitation, limitation letters of credit in respect of workers’ compensation claims claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims or self-insuranceclaims; provided, however, that, 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;
(126) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such 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 business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees 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; provided that:
provided, however, that (aA) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that such balance sheet for purposes of this clause (aA)); and
) and (bB) the maximum assumable liability in respect of that all such Indebtedness shall at no time exceed the gross proceeds including non-cash noncash proceeds (the fair market value of those non-cash such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that and any Restricted Subsidiary Subsidiaries in connection with that such disposition;
(137) Indebtedness of the issuance of Disqualified Stock or preferred stock Issuer owed to and held by any Restricted Subsidiary or Indebtedness of the Issuer’s a Restricted Subsidiaries issued Subsidiary owed to and held by the Issuer or another any Restricted Subsidiary; provided provided, however, that (iA) any subsequent issuance or transfer of any Equity Securities Capital Stock or any other event that results in any such Disqualified Stock Restricted Subsidiary ceasing to be a Restricted Subsidiary or preferred stock being held by a Person other than any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary thereof and (iiSubsidiary) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the issuer thereof and (B) if the Issuer is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of the Issuer with respect to the Securities;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or a Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Preferred Stock;
(149) the incurrence by Hedging Obligations of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of its Restricted Subsidiaries limiting (A) interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) exchange rate risk with respect to any currency exchange;
(10) obligations in respect of performance and surety bonds and performance and completion Guarantees guarantees provided by the Issuer or any Restricted Subsidiary or obligations in respect of letters of credit related thereto, in each case in the ordinary course of business or consistent with past practice;
(11) Indebtedness of the Issuer or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and liquidation preference of all other Indebtedness and Preferred Stock then outstanding and incurred pursuant to this clause (11), does not at any one time outstanding exceed $150.0 million (it being understood that any Indebtedness or Preferred Stock incurred pursuant to this clause (11) shall cease to be deemed incurred or outstanding for purposes of this clause (11) but shall be deemed incurred for the purposes of Section 4.10(a) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred such Indebtedness or Preferred Stock under Section 4.10(a) without reliance on this clause (11));
(12) any guarantee by the Issuer or a Guarantor of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the ordinary course Securities or the Guarantee of businesssuch Restricted Subsidiary, as applicable, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantor’s Guarantee with respect to the Securities substantially to the same extent as such Indebtedness is subordinated to the Securities or the Guarantee of such Restricted Subsidiary, as applicable;
(1513) the incurrence by the Issuer or any Guarantor Restricted Subsidiary of Indebtedness in an aggregate principal amount or Preferred Stock that serves to refund or refinance any Indebtedness incurred as permitted by Section 4.10(a) and clauses (2), (3) and (4) above, this clause (13) and clause (14) below or accreted value, as applicable) at any time outstanding, Indebtedness issued to so refund or refinance such Indebtedness including all Permitted Refinancing additional Indebtedness incurred to refundpay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, refinance or replace any however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred pursuant which is not less than the remaining Weighted Average Life to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries Maturity of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding being refunded or refinanced, (with letters of credit being deemed to have a principal amount equal B) to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted extent such Refinancing Indebtedness incurred refinances Indebtedness subordinated or pari passu to refundthe Securities, refinance such Refinancing Indebtedness is subordinated or replace any pari passu to the Securities at least to the same extent as the Indebtedness incurred pursuant to this clause being refinanced or refunded, (16), C) shall not to exceed $50.0 million;
include (17x) the incurrence Indebtedness or Preferred Stock of any Indebtedness by a Receivables Subsidiary that is not recourse to a Guarantor that refinances Indebtedness or Preferred Stock of the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakingsy) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) or Preferred Stock of the Issuer or a Restricted Subsidiary incurred that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D) 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 (E) shall not have a stated maturity date prior to finance an acquisition the Stated Maturity of the Indebtedness being refunded or refinanced; and provided, further, that subclauses (yA), (B) and (E) of this clause (13) will not apply to any refunding or refinancing of any Senior Debt;
(14) Indebtedness or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Preferred Stock is not incurred in connection with or in contemplation of such acquisition or merger; and provided, further, that after giving effect to any such transaction, including incurrence of Indebtedness either (A) the incurrence and/or repayment Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception or retirement of any Indebtedness, (B) the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transactionacquisition;
(1915) contingent liabilities Indebtedness arising out from the honoring by a bank or financial institution of endorsements of checks and other negotiable instruments for deposit a check, draft or collection similar instrument drawn against insufficient funds in the ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(2016) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;
(17) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Securitization Subsidiary (except for Standard Securitization Undertakings);
(18) the incurrence of (A) Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product Financing Indebtedness;
(19) Contribution Indebtedness;
(20) (a) if the Issuer could incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries of the Issuer not otherwise permitted hereunder or (b) if the Issuer could not incur $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception hereof after giving effect to such borrowing, Indebtedness of Foreign Subsidiaries of the Issuer incurred for working capital purposes, provided, however, that the aggregate principal amount of Indebtedness incurred under this clause (20) which, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (20), does not exceed the greater of (x) $100.0 million and (y) 10% of the Consolidated Tangible Assets of the Foreign Subsidiaries; and
(2221) contingent liabilities arising out Indebtedness consisting of endorsements promissory notes issued by the Issuer or any Guarantor to current or former officers, directors and employees or their respective estates, spouses or former spouses to finance the purchase or redemption of checks and other negotiable instruments for deposit or collection in the ordinary course Equity Interests of business. Holdco permitted by Section 4.11.
(c) For purposes of determining compliance with this Section 4.10, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2221) above, or is entitled to be incurred pursuant to Section 4.10(a)the first paragraph of this covenant, the Issuer will be permitted to classify and later reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at covenant, and such timeitem of Indebtedness will be treated as having been incurred pursuant to only one of such categories. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes of this covenant. Notwithstanding the foregoing, Indebtedness under the Credit Agreement outstanding on the date of on which Securities are first issued and authenticated under this Indenture shall will be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (bthe definition of “Permitted Debt” in Section 4.10(b) and the Issuer shall not be permitted to reclassify all or any portion of this Section 4.10 shall be deemed for purposes such Indebtedness. The maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may incur pursuant to this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is shall not be deemed to be borrowedexceeded, repaid and reborrowed daily (or otherwise periodically)with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies.
Appears in 2 contracts
Sources: Indenture (Warner Alliance Music Inc), Indenture (LEM America, Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, provided that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may issue preferred stockincur Indebtedness (including Acquired Debt), if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 3.00 to 11.00, 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 the Disqualified Stock or the preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of the Company of additional Indebtedness and letters of credit under the Senior Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Facility in an aggregate principal amount (excluding, in each case, interest (including any accrual or payment of in kind interest that may or has been added to principal) fees, costs, expenses and charges owed under the Senior Credit Facility) at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed (a) $175.0 million (plus up to an additional $15.0 million in respect of additional principal (including overadvances) under the greater Senior Credit Facility, as in effect on the Issue Date), less (b) the sum of (x) $385.0 million the aggregate amount of all repayments, optional or mandatory, of the principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date as a result of the application of any Net Proceeds of Asset Sales pursuant to Section 4.10(b)(l)(a) hereof and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all commitment reductions with respect to any revolving credit extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date as a result of the application of any Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) Sales pursuant to Section 4.13 and less, in the case of both clause (x4.10(b)(1)(a) and clause (y), amounts outstanding under any Qualified Receivables Transactionshereof;
(2) the incurrence by the Issuer or Company and its Restricted Subsidiaries of Existing Indebtedness, including without limitation any Guarantors of PIK Notes (as defined in the Existing IndebtednessIndenture) issued as PIK Interest (as defined in the Existing Indenture) on the Existing Notes issued on the Original Issue Date (or issued as PIK Interest (as defined in the Existing Indenture) on PIK Notes (as defined in the Existing Indenture) issued under the Existing Indenture), and in each case, guarantees thereof;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by (i) the Notes to be issued on the date Issue Date, (ii) PIK Notes issued as PIK Interest on the Notes issued on the Issue Date (or issued as PIK Interest on PIK Notes previously issued under this subclause (ii)) and (iii) guarantees of this Indenture the Notes described in subclauses (i) and related Note Guarantees(ii);
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred within 360 days of the acquisition or completion of construction or installation for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsAttributable Debt relating to a sale leaseback transaction, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $7.5 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (45), (514), (15) or and (1618) of this Section 4.10(bparagraph (b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health disability or other employee benefits or property, casualty or liability insurance or self-insurance obligations, reimbursement obligations with respect to commercial letters of credit, bankers’ acceptances and performance and surety bonds in the ordinary course of business;
(11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary in accordance with the terms of this Indenture, other than Indebtedness or guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(13) endorsements of instruments or other items of deposit;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness owed to any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries in connection with the repurchase, redemption or other acquisition or retirement of Equity Interests held by any such current or former officer, director or employee of the Company or any of its Restricted Subsidiaries; provided that such repurchase, redemption or other acquisition or retirement is permitted by Section 4.07(b)(5) hereof;
(15) Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of or was otherwise acquired by or merged into the Company or such Restricted Subsidiary); provided that after giving effect to such transaction, (a) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof and (b) such Restricted Subsidiary is (i) a Domestic Restricted Subsidiary and becomes a Guarantor or (ii) is a Foreign Restricted Subsidiary and the aggregate principal amount of Indebtedness at any time outstanding under this clause (15)(b)(ii), together with the aggregate principal amount of Indebtedness outstanding under clause (16) below, not to exceed $12.5 million;
(16) the incurrence by Foreign Restricted Subsidiaries of the Company of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (16), together with the aggregate principal amount outstanding pursuant to clause (15)(b)(ii) above, not to exceed the excess of (a) $15.0 million over (b) the sum of (x) the aggregate amount of all optional repayments of the principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date and (y) the aggregate amount of all commitment reductions with respect to any revolving credit extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date;
(17) [reserved];
(18) 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 renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (18), not to exceed $10.0 million; and
(19) the incurrence by the Company and the Guarantors of Indebtedness represented by (i) Additional Notes in an aggregate principal amount not to exceed $25.0 million, the proceeds of which are used to finance the acquisition of a Permitted Business or a Person engaged in a Permitted Business, (ii) PIK Notes issued as PIK Interest on such Additional Notes (or issued as PIK Interest on PIK Notes previously issued under this subclause (ii)) and (iii) guarantees of the Additional Notes described in subclauses (i) and (ii).
(c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt but excluding the Existing Notes) that is subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also 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 subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis with respect to the same Collateral.
(d) For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
this covenant. Indebtedness under the Senior Credit Facility will be deemed to have been incurred in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interestinterest or premium, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values.
(a))e) 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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance date of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 2 contracts
Sources: Indenture (A. M. Castle & Co.), Indenture (Total Plastics, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, provided that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries any Guarantor may incur Indebtedness or issue preferred stock, stock if the Fixed Charge Consolidated Coverage Ratio for the Issuer’s Company's most 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 2.00 2 to 1, or the ratio of the Consolidated Indebtedness less Unrestricted Cash to Consolidated Tangible Net Worth of the Company is less than 3 to 1, 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 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, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or any Guarantor Company and the Guarantors of Indebtedness or Disqualified Stock under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $450.0 million or (b) the amount of the Borrowing Base as of the date of such incurrence (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2ii) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4iv) the incurrence by the Issuer Company or any of its a Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligationsor Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in an aggregate the case of clause (1), such Indebtedness or Disqualified Stock was incurred by the prior owner of such assets or the Company or such Restricted Subsidiary prior to such acquisition by the Company or a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such acquisition by the Company or a Restricted Subsidiary and in the case of clause (2), any such Indebtedness incurred may not exceed the cost of such property or equipment; and provided that the principal amountamount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (iv) and including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4), iv) does not to exceed, at any time outstanding, the greater of (x) exceed $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuermillion;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Guarantor 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 was permitted by this Indenture to be incurred under Section 4.10(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (15xv) or (16xvi) of this Section 4.10(b)paragraph;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (aA) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; andand (B)
(b) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Guarantor of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or with respect to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and floating rate Indebtedness that do not increase is permitted by the Indebtedness terms of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderthis Indenture to be outstanding;
(8) viii) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary Guarantor of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16covenant;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10ix) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer Company 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (15ix), not to exceed $75.0 million20.0 million (it being understood that any Indebtedness incurred under this clause (ix) shall cease to be deemed incurred or outstanding for purposes of this clause (ix) but shall be deemed to be incurred for purposes of the first paragraph of this Section 4.09 -45- from and after the first date on which the Company could have incurred such Indebtedness under the first paragraph of this Section 4.09 without reliance upon this clause (ix));
(16x) Non-Recourse Financing incurred by the Company or any Restricted Subsidiary for the acquisition, development and/or improvement of real property or any infrastructure related thereto; provided that such Non-Recourse Financing is at the date of acquisition or the commencement of the development and/or improvement at least 70% of the estimated cost of the assets so acquired, developed or improved;
(xi) the incurrence by the Foreign Company or any Restricted Subsidiary of direct obligations to repay or guarantee shortfalls in payments of bond financing issued by community development districts and local government districts to construct infrastructure improvements ("CDD Obligations"), provided that the aggregate amount of all CDD Obligations of the Company and its Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount that is due and payable at any one time outstanding does not exceed $10.0 million;
(xii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness in connection with letters of credit being deemed (including, without limitation, letters of credit in respect of workers' compensation claims or self insurance), Indebtedness with respect to have a principal amount equal reimbursement type obligations regarding workers compensation claims, escrow agreements, bankers' acceptances and surety and performance bonds (in each case to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), extent that such incurrence does not to exceed $50.0 million;
(17) result in the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse obligation to the Issuer or repay any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17obligation relating to borrowed money), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20xiii) shares of preferred stock of a Restricted Subsidiary issued to the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption Company or other acquisition another Restricted Subsidiary; provided that any subsequent issuance or retirement for value transfer of any Equity Interests of the Issuer Capital Stock or any Parentother event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case held to be an issuance of shares of preferred stock;
(xiv) 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 acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any former Person acquiring all or current employeesany portion of such business, officers, directors assets or consultants a Subsidiary for the purpose of financing such acquisition; provided that such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiv));
(xv) Indebtedness incurred by the Company or any Restricted Subsidiary pursuant to any Construction Loan, provided that (A) at the time the Construction Loan is entered into or amended to include a new project or projects, as the case may be, the Construction Loan is not in excess of 85% of the estimated total cost of the projects under such Construction Loan taken as a whole, including land at fair market value, interest and soft costs (net of unrestricted deposits) and (B)(1) at the time any Construction Loan is entered into that relates to a single project, there are Valid Purchase Contracts Proceeds in excess of 65% of the maximum Construction Loan amount taken as a whole or (2) at the time any Construction Loan is entered into that relates to more than one project or if an existing Construction Loan is amended to include a new project or projects, there are Valid Purchase Contracts Proceeds in excess of 70% of the maximum Construction Loan amount taken as a whole; provided that under clause(B)(2), for each individual project there are Valid Purchase Contract Proceeds for such project in excess of 30% of the maximum Construction Loan amount for such project, and provided, further, that in the event a Default or Event of Default has occurred and is continuing or would be caused thereby, this clause (xv) shall be unavailable to enter into a new Construction Loan or amend an existing Construction Loan to include a new project or projects; and
(xvi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon pursuant to Construction Loans existing as of the death, disability or termination of employment Issue Date up to the limits of such Persons in an aggregate amount at any one time outstanding not to exceed Construction Loan existing on the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessIssue Date. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xvi) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09, the Issuer Company will be permitted to classify (and later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, incurrence in any manner that complies with this Section 4.10 at 4.09. Accrual of interest, accretion or amortization of original issue discount or the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09; provided, in each such timecase, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Agreement Facilities on date of this Indenture the Issue Date shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1i) of the second paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)4.09.
Appears in 2 contracts
Sources: Indenture (Wci Communities Inc), Indenture (Communities Home Builders Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company and the Guarantors will not issue any Disqualified Stock and the Issuer Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness (a) Indebtedness, letters of credit and bankers’ acceptances under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding as of any date of incurrence of any such Indebtedness (together with letters the aggregate amount of credit being any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (1)(b) and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Issuer and the Guarantors thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (x) $385.0 1,500.0 million and (y) such amount as would not cause the amount of the Borrowing Base Consolidated Senior Secured Leverage Ratio, calculated as of the date of such incurrence, lessto exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, in the case of both refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (x1) and was not, as of the date of incurrence of such Permitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (y), the aggregate amount a) above as a result of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsreclassification;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, Subsidiary (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets), in an aggregate principal amountamount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 300.0 million or and (yb) 34.0% of Consolidated Tangible Total Assets (determined as of the Issuerdate of incurrence);
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1517), (18), (20), (26) or (1627) of this below or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are incurred in the ordinary course of business not entered into for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderspeculation;
(8) the Guarantee issuance by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer 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 Issuer 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 (8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.10; provided that4.09 and could have been incurred (in compliance with this Section 4.09) by the Person so Guaranteeing such Indebtedness;
(10) the incurrence of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(11) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self- insurance, health, disability or other employee benefits or property, casualty or liability insurance provided to the Company or any of its Restricted Subsidiaries, bankers’ acceptances, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business; provided that the underlying obligation to perform is that of the Company and its Restricted Subsidiaries and not that of the Company’s Unrestricted Subsidiaries; and provided further that such underlying obligation is not in respect of borrowed money;
(12) the incurrence of Indebtedness that may be deemed to arise as a Guarantee result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn-out or similar Obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Company or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary; provided that (a) any amount of such Obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary shall not be permitted under this clause (12) and (b) the maximum aggregate liability in respect of all such Obligations outstanding under this clause (12) shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;
(13) Indebtedness incurred under commercial letters of credit issued for the account of the Company or any of its Restricted Subsidiaries in the ordinary course of business (and not for the purpose of, directly or indirectly, incurring Indebtedness or providing credit support or a similar arrangement in respect of Indebtedness); or Indebtedness of the Company or any of its Restricted Subsidiaries under letters of credit and bank guarantees backstopped by letters of credit under the Credit Facilities;
(14) pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licenses, contractors, franchisees or customers of obligations, other than Indebtedness, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to directors, officers, managers or employees of the Company or any of its Restricted Subsidiaries in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the notes, is not secured by any assets of the Company or any of its Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the notes, in an aggregate principal amount at any time outstanding not to exceed $25.0 million;
(16) the Ralcorp Obligations;
(17) the incurrence by any Foreign Subsidiary of Indebtedness and/or the guarantee by the Company and/or any of its Restricted Subsidiaries of such Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (17), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (17), not to exceed the greater of (a) $300.0 million and (b) 4.0% of Consolidated Total Assets (determined as of the date of incurrence);
(18) the incurrence by the Company or any of its Restricted Subsidiaries of any Capitalized Lease Obligation resulting from a Sale and Leaseback Transaction in an aggregate principal amount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (18), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (18), not to exceed the greater of $100.0 million and 1.50% of Consolidated Total Assets (determined as of the date of incurrence);
(19) Indebtedness in respect of Receivables Program Obligations;
(20) the incurrence of Acquired Debt or other Indebtedness incurred in connection with, or in contemplation of, an acquisition (including by way of merger or consolidation) by the Company or any of its Restricted Subsidiaries; provided that after giving pro forma effect to such acquisition, either (a) the Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the net proceeds therefrom) would be at least 2.0 to 1.0 or (b) the Company’s pro forma Fixed Charge Coverage Ratio would be greater than the actual Fixed Charge Coverage Ratio of the Company immediately prior to such acquisition and incurrence;
(21) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes;
(22) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(23) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(24) Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(25) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts;
(26) the incurrence of Indebtedness by any Restricted Subsidiary of the Company that is not a Guarantor, and/or the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of any joint venture of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (26), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (26), not to exceed the greater of $275.0 million and 3.0% of Consolidated Total Assets (determined as of the date of incurrence); and
(27) 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, as of the date of incurrence of any Indebtedness pursuant to this clause (27), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (27), not to exceed the greater of $400.0 million and 4.5% of Consolidated Total Assets (determined as of the date of incurrence). The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is contractually subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in the right of payment to the Notes and the applicable Subsidiary Guarantee on substantially the same terms. For purposes of the foregoing, no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of being unsecured or secured by a junior priority Lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them, including intercreditor agreements that contain customary provisions requiring turnover by holders of junior priority Liens of proceeds of collateral in the event that the security interests in favor of the holders of the senior priority in such intended collateral are not perfected or invalidated and similar customary provisions protecting the holders of senior priority Liens. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (27) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this Section 4.16;
(9) 4.09. In addition, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 treated as an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).incu
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Issuer Company nor any Restricted Subsidiary will not issue any Disqualified Stock and the Issuer Company will not permit any of its other Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 issued, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company and or any Guarantor Restricted Subsidiary of additional Indebtedness (including letters of credit) under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Subsidiaries thereunder) not to exceed an amount equal to the greater of (xa) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence925.0 million, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the Issue Date to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a the Credit Facility, to Facilities and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 4.10 hereof and less, in (b) 30% of ACNTA as of the case date of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionssuch incurrence;
(2) the incurrence by the Issuer Company or any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries of Indebtedness the Guarantors represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and any Exchange Notes and related Note GuaranteesGuarantees issued in exchange therefor pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $20.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (1612) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness Indebtedness, Disqualified Stock or preferred stock between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company 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 then due with respect to the Notes, or any if a Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness neither the Company nor another Guarantor is owed to a Restricted Subsidiary that is not a Guarantorthe obligee, 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 Guarantee of the Issuer, or the Note Guarantee, in the case of a such Guarantor; and
(bB) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Indebtedness, Disqualified Stock or preferred stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof of the Company, and (ii) any sale or other transfer of any such Indebtedness Indebtedness, Disqualified Stock or preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or preferred stock by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer any Guarantor that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the incurrence by the 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 the Company or any of its Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary that is not permitted by this clause (10);
(11) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company and 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) Indebtedness, Disqualified Stock or preferred stock of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Company or any Restricted Subsidiary (other than Indebtedness, Disqualified Stock or preferred stock Incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) after giving effect to the incurrence of such Indebtedness, Disqualified Stock or preferred stock pursuant to this clause (12);
(13) 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 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 a Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(14) 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, not to exceed $50.0 million; and
(15) Indebtedness to the extent the proceeds thereof are used to finance insurance premiums. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) of this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this covenant. 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. Indebtedness of any Person existing at the time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Indenture (Energy Xxi (Bermuda) LTD), Indenture (Energy Xxi (Bermuda) LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”; with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company may incur Indebtedness (including Acquired Debt) and the issue Disqualified Stock, and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, (x) for so long as any Class D Preferred Units are outstanding, if the Total Leverage Ratio is no more than 4.75 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) and (y) thereafter, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four full fiscal quarters for which internal financial statements are available Trailing Four Quarters immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter periodTrailing Four Quarter Period; provided, howeverfurther, that the aggregate principal amount of Indebtedness or Disqualified Stock that may be incurred under of non-Guarantor Subsidiaries outstanding pursuant to this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09(a) shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or preferred stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (including the ABL Facility, the Term Loan Facility and the incurrence by Notes and the Guarantors of related Note Guarantees thereofissued on the Issue Date) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the sum of (I) ABL Obligations and Pari Passu ABL Obligations in an aggregate principal amount not to exceed the greater of (x) $385.0 600.0 million and (y) the amount of the Borrowing Base as determined at the time of incurrence, plus (II) other Indebtedness not to exceed the sum of (A) an aggregate principal amount not to exceed the greater of (x) $2.95 billion and (y) 40% of the date Total Assets of the Company, plus (B) at the time of such incurrence, lessan amount equal to the maximum principal amount that could be incurred such that after giving pro forma effect thereto, in the case First Lien Leverage Ratio would be no greater than 4.50 to 1.00; provided that for purposes of both determining the amount that may be incurred under clause (x) 1)(II)(B), all unsecured Indebtedness and Junior Lien Indebtedness incurred under this clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor 1) shall be deemed to repay any Indebtedness under Credit Facilities (and, be included in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (xi) and clause (y), amounts outstanding under any Qualified Receivables Transactions;of the definition of “First Lien Leverage Ratio”.
(2) the incurrence by the Issuer Company or any Guarantors its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and Class D Preferred Units;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to extend, retire, redeem, repay, renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, 3) at any time outstandingtime; provided that, immediately after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (3) and then outstanding does not exceed the greater of (xa) $30.0 200.0 million or and (yb) 33.75% of Consolidated Tangible the Total Assets of the IssuerCompany;
(54) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, redeem, repay, renew, refund, refinance refinance, replace, defease, discharge or replace otherwise retire for value, any Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of any Restricted Subsidiary, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses clause (2), (3), (4), (5), (15) or (1611) of this Section 4.10(b4.09(b) or this clause (4);
(65) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer or Company nor a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (5);
(6) 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; and
(B) any sale or other transfer of any such preferred stock to a Person that is neither the Company nor a Restricted Subsidiary, 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 (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of to the Issuer extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or the applicable Note Guarantee, in then the case of a Guarantee of any Restricted Subsidiary that is not a Guarantormust be subordinated or pari passu, such Restricted Subsidiary complies with Section 4.16as applicable, to the same extent as the Indebtedness Guaranteed;
(9) the accrual incurrence by the Company or any Restricted Subsidiary of interest, Indebtedness consisting of the accretion or amortization financing of original issue discount, the payment of interest on any Indebtedness insurance premiums in the form of additional Indebtedness customary amounts consistent with the same terms, operations and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares business 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedCompany and its Restricted Subsidiaries;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurancecredit; provided, however, provided that, upon the drawing of such letters of credit or the incurrence of such Indebtednesscredit, such obligations are reimbursed within 30 days following such drawing drawing;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, immediately after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (11) and then outstanding does not exceed $50.0 million;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))Permitted Acquisition Indebtedness; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance additional Indebtedness and surety bonds and completion Guarantees provided the issuance by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence Company of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; providedDisqualified Stock, provided that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that immediately after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtednessissuance, the Fixed Charge Coverage Ratio would be equal amount of all such Indebtedness and Disqualified Stock incurred or issued pursuant to this clause (13) and then outstanding (including all Indebtedness and Disqualified Stock incurred or issued to Refinance any Indebtedness or Disqualified Stock incurred or issued pursuant to this clause (13)) does not exceed the greater than of (a) $150.0 million and (b) 3.00% of the Fixed Charge Coverage Ratio immediately prior to Total Assets of the Company determined on the date of such transaction;incurrence.
(19c) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant Subject to Section 4.11(b)(5);
4.09(d) below, the Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (21including Permitted Debt) the incurrence that is contractually subordinated in right of payment to any other Indebtedness of the Issuer Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or the applicable Note Guarantee on substantially identical terms. No Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary supported Guarantor solely by virtue of being unsecured or by virtue of being secured on a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; andjunior priority basis.
(22d) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2213) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).to
Appears in 2 contracts
Sources: Supplemental Indenture (NGL Energy Partners LP), Indenture (NGL Energy Partners LP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectivelyin any such case, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, PROVIDED that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Mirror Note Issuers and the Guarantors may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, PROVIDED FURTHER that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness must be expressly subordinated may issue preferred stock to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Issuer, Company or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Wholly Owned Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision Company, or in a transaction or series of this Section 4.10; provided that, in the case related transactions consisting of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing sale of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided PROVIDED that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that immediately after giving effect to such sale, neither the Company nor any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of its Subsidiaries owns any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of and such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance sale complies with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 2 contracts
Sources: Indenture (Paramount Resources LTD), Indenture (Paramount Resources LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Company or its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of Disqualified Stock, as set forth below (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiaries of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions715.0 million;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $25.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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) or Disqualified Stock that is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.09 or clauses (2), (3), (4), (5), (15) or (1612) of this Section 4.10(b)paragraph;
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries or the refinancing or replacement of existing intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
: (a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
and (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer 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 or for hedging foreign currency exchange risk, in each case to the extent the Hedging Obligations are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for any speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderpurpose;
(8) the Guarantee guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accruedaccrued interest;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness, including Indebtedness constituting reimbursement obligations with respect to represented by letters of credit issued for the account of the Company or any Restricted Subsidiary, incurred in respect of workers' compensation claims, self-insurance obligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business; provided, includingthat the underlying obligation to perform is that of the Company and its Restricted Subsidiaries and not that of the Company's Unrestricted Subsidiaries; provided further, without limitation, letters of credit that such underlying obligation is not in respect of workers’ compensation claims or self-insurance, or other Indebtedness borrowed money;
(11) the issuance of Series B Preferred Stock by the Company solely for the purpose of the payment of dividends to the holders of the Series B Preferred Stock made in accordance with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceCompany's Amended and Restated Charter;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (1512), not to exceed $75.0 60.0 million;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness, including but not limited to Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiary, 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 business, assets or Equity Interests 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 Equity Interests for the purpose of financing such acquisition;
(14) the incurrence by the Company or any Restricted Subsidiary of 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 that such Indebtedness is extinguished within five business days of incurrence;
(15) the incurrence by the Company or a Restricted Subsidiary of Qualified Trust Indebtedness the proceeds of which are used to finance a Restricted Payment permitted by clauses (6) or (12) of the second paragraph of Section 4.07 hereof; and
(16) the incurrence by the Foreign Restricted Subsidiaries Company of indebtedness expressly subordinated to the Issuer of Indebtedness in Notes not to exceed an aggregate principal amount at of $2.9 million in satisfaction of the Stockholder Litigation. The Company shall not incur any one time outstanding Indebtedness (with letters including Permitted Debt) that is contractually subordinated in right of credit being deemed payment to have a principal amount equal any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables TransactionNotes on substantially identical terms; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedhowever, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of no Indebtedness of the Issuer or Company shall be deemed to be contractually subordinated in right of payment to any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess other Indebtedness of the stated amount Company solely by virtue of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessbeing unsecured. For purposes of determining compliance with the provisions in this Indenture relating to this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2216) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09, the Issuer will Company shall be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Permitted Debt.
Appears in 2 contracts
Sources: Supplemental Indenture (Cca Properties of America LLC), Supplemental Indenture (Corrections Corp of America)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Issuer’s Fixed Charge Coverage Ratio for the Issuer’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 1.1 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.3(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any and the Guarantor of the Notes and the Note Guarantee in the aggregate principal amount to be issued on the Closing Date and any Permitted Refinancing Indebtedness under Credit Facilities that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (and 1);
(2) the incurrence by the Guarantors Issuer or any of Guarantees thereofits Restricted Subsidiaries of the Existing Indebtedness and any Indebtedness that is incurred pursuant to or in lieu of a commitment in existence as of the Closing Date;
(3) the incurrence by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (3) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million 5.0 billion and (yB) the amount Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities secured on a junior priority basis by some or all of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any collateral securing Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both contemplated by clause (xA) and of this clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) in an aggregate principal amount at any one time outstanding under this clause (3)(B) (with letters of credit being deemed to have a principal amount equal to the incurrence by maximum potential liability of the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes thereunder) not to be issued on the date of this Indenture and related Note Guaranteesexceed $3.0 billion;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by by, or incurred in connection with, Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing (or reimbursing the Issuer or any of its Restricted Subsidiaries for) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment (including, without limitation, airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries of (A) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.3(a) hereof or clauses (2), (3), (4), (5), (156), (13), (20), (21), (24) or (1625) of this Section 4.10(b)4.3(b) hereof and (B) Permitted Refinancing Indebtedness secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets replacing, renewing, refunding, extending, refinancing, defeasing or discharging any other Indebtedness of the Issuer or any of its Restricted Subsidiaries that was secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets;
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness, Disqualified Stock or preferred stock (including Acquired Debt) (A) as part of, or to finance, the acquisition (including by way of merger) of any Permitted Business, (B) incurred in connection with, or as a result of, the merger, consolidation or amalgamation of any Person (including the Issuer or any of its Restricted Subsidiaries) that owns a Permitted Business with or into the Issuer or a Restricted Subsidiary of the Issuer, or into which the Issuer or a Restricted Subsidiary of the Issuer is merged, consolidated or amalgamated, or (C) that is an outstanding obligation of a Person that owns a Permitted Business at the time that such Person is acquired by the Issuer or a Restricted Subsidiary of the Issuer and becomes a Restricted Subsidiary of the Issuer;
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and and/or any of its Restricted Subsidiaries; provided, however, that:;
(a) if 8) the issuance by any Restricted Subsidiaries of the Issuer to the Issuer or to any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a of its Restricted Subsidiary that is not a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash Subsidiaries of all Obligations with respect to the Notes, in the case shares of the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)preferred stock;
(79) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 10) the Guarantee by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.3; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and the payment of dividends on Disqualified Stock then such Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10)guaranteed;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting or 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 claims, self-insuranceinsurance obligations, or bankers’ acceptances, performance bonds and surety bonds in the ordinary course of business (including, without limitation, in respect of customs obligations, landing fees, taxes, airport charges, overfly rights and any other Indebtedness with respect obligations to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceairport and governmental authorities);
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;
(13) Indebtedness (A) constituting credit support or financing from aircraft or engine manufacturers or their affiliates or (B) incurred to finance the acquisition of aircraft, airframes, engines, spare parts, flight simulators, flight training devices, QEC Kits or other operating assets; provided that no Indebtedness may be incurred in reliance on subsection (B) of this clause (13) more than twenty-four months after such acquisition;
(14) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates (a) to purchase or redeem Capital Stock of the Issuer issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $10.0 million in any twelve-month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Issuer;
(15) reimbursement obligations in respect of standby or documentary letters of credit or banker’s acceptances;
(16) surety and appeal bonds that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Issuer or any of its Restricted Subsidiaries to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Issuer and its Restricted Subsidiaries;
(18) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Issuer or to any other Restricted Subsidiary of the Issuer or their assets (other than such Receivables Subsidiary and its assets and, as to the Issuer or any other Restricted Subsidiary of the Issuer, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Issuer or any of its Restricted Subsidiaries owed to one or more Persons in connection with the financing of insurance premiums in the ordinary course of business;
(20) the incurrence of obligations under the Co-Branded Agreement to the extent such obligations may be deemed to constitute Indebtedness of the Issuer or any of its Restricted Subsidiaries;
(21) the incurrence by the Issuer or the Guarantor (or, in the case of the “Co-Branded Secured Obligations” (as defined in the Credit Agreement as in effect on the Closing Date), any Restricted Subsidiary of the Issuer) of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) secured by a Lien on the “Collateral” (as defined in the Credit Agreement as in effect on the Closing Date) that is junior to the Liens securing the “Obligations” (as defined in the Credit Agreement as in effect on the Closing Date) (including, without limitation, the “Co-Branded Secured Obligations”), and Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (21);
(22) Indebtedness arising from agreements of the Issuer or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that all such Indebtedness shall at no time exceed the gross proceeds proceeds, including non-cash proceeds (the fair market value Fair Market Value of those such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that or any of its Restricted Subsidiary Subsidiaries in connection with that such disposition;
(1323) Indebtedness of the issuance Issuer or any of Disqualified Stock its Restricted Subsidiaries consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business and consistent with past practices of the Issuer or preferred stock by any the applicable Restricted Subsidiary of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(1424) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in respect full in cash of performance all Notes and surety bonds Guarantor Obligations on terms not materially less favorable to the Holders of the Notes than those customary at the time of incurrence (determined in good faith by a senior financial officer of the Issuer) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu with all Notes and completion Guarantees Guarantor Obligations and convertible into common stock of the Issuer; provided by that the Issuer aggregate principal amount of Indebtedness incurred pursuant to clauses (A) and (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or such Restricted Subsidiary in the ordinary course of business;discharge any Indebtedness incurred pursuant to this clause (24), does not exceed $1.5 billion at any time outstanding; and
(1525) the incurrence by the Issuer or any Guarantor 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness incurred pursuant to this clause (1625), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided3.0 billion, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessoutstanding. For purposes of determining compliance with this Section 4.104.3, in the event that any proposed if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described set forth in clauses (1) through (2225) above, of Section 4.3(b) hereof or is entitled to be incurred pursuant to Section 4.10(a)4.3(a) hereof, the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. Indebtedness under 4.3; provided that (A) all “Junior Secured Debt” (as defined in the Credit Agreement as in effect on date of this Indenture shall the Closing Date) will at all times be deemed to have been incurred in reliance on such date pursuant the exception provided by Section 4.3(b)(21) hereof and (B) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to Section 4.10(b)(1). Any Indebtedness be incurred under Credit Facilities pursuant to clause clauses (1), (3) or (21) of paragraph (bSection 4.3(b) hereof. None of this Section 4.10 shall be deemed the following will constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant Section 4.3:
(1) the accrual of interest or preferred stock dividends;
(2) the accretion or amortization of original issue discount (“OID”);
(3) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;
(4) the reclassification of preferred stock as Indebtedness due to have been incurred a change in accounting principles; and
(5) the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.3, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Issuer or any provisions under any Credit Facility that provide that such Indebtedness is of its Restricted Subsidiaries may incur pursuant to this Section 4.3 shall not be deemed to be borrowedexceeded 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 as of such date, repaid and reborrowed daily in the case of any Indebtedness issued with OID;
(or otherwise periodically)2) the principal amount of the Indebtedness as of such date, 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 as of such date; and
(B) the amount of the Indebtedness of the other Person as of such date.
Appears in 2 contracts
Sources: Fourth Supplemental Indenture (United Airlines, Inc.), Supplemental Indenture (United Airlines, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), ) and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries any Guarantor may incur Indebtedness or issue preferred stock, stock if the Fixed Charge Consolidated Coverage Ratio for the IssuerCompany’s most 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 2.00 2 to 1, or the ratio of the Consolidated Indebtedness less Unrestricted Cash to Consolidated Tangible Net Worth of the Company is less than 3 to 1, 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 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, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer or any Guarantor Company and the Guarantors of Indebtedness or Disqualified Stock under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding not to exceed the greater of (a) $1.0 billion or (b) the amount of the Borrowing Base as of the date of such incurrence (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2ii) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes (including any PIK Notes or the accretion of any interest) and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4iv) the incurrence by the Issuer Company or any of its a Restricted Subsidiaries Subsidiary of Indebtedness represented by Capital Lease Obligationsor Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in an aggregate the case of clause (1), such Indebtedness or Disqualified Stock was incurred by the prior owner of such assets or the Company or such Restricted Subsidiary prior to such acquisition by the Company or a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such acquisition by the Company or a Restricted Subsidiary and in the case of clause (2), any such Indebtedness incurred may not exceed the cost of such property or equipment; and provided that the principal amountamount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (iv) and including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4), iv) does not to exceed, at any time outstanding, exceed the greater of (x) $30.0 75.0 million or (y) 32.5% of Consolidated Tangible Assets of the IssuerTotal Assets;
(5v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Guarantor 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 was permitted by this Indenture to be incurred under Section 4.10(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (15xv), (xvi), (xvii), (xviii) or (16xix) of this Section 4.10(b)paragraph;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (aA) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
and (bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Guarantor of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or with respect to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and floating rate Indebtedness that do not increase is permitted by the Indebtedness terms of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderthis Indenture to be outstanding;
(8) viii) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary Guarantor of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16covenant;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10ix) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16ix), not to exceed $50.0 millionmillion (it being understood that any Indebtedness incurred under this clause (ix) shall cease to be deemed incurred or outstanding for purposes of this clause (ix) but shall be deemed to be incurred for purposes of the first paragraph of this Section 4.09 from and after the first date on which the Company could have incurred such Indebtedness under the first paragraph of this Section 4.09 without reliance upon this clause (ix));
(17x) Non-Recourse Financing incurred by the Company or any Restricted Subsidiary for the acquisition, development and/or improvement of real property or any infrastructure related thereto;
(xi) the incurrence by the Company or any Restricted Subsidiary of direct obligations to repay or guarantee shortfalls in payments of bond financing issued by community development districts and local government districts to construct infrastructure improvements (“CDD Obligations”), provided that the aggregate amount of all CDD Obligations of the Company and its Restricted Subsidiaries that is due and payable at any one time does not exceed the greater of (x) $75.0 million or (y) 2.5% of Total Assets;
(xii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness in connection with letters of credit (including, without limitation, letters of credit in respect of workers’ compensation claims or self insurance), Indebtedness with respect to reimbursement type obligations regarding workers compensation claims, escrow agreements, bankers’ acceptances and surety and performance bonds (in each case to the extent that such incurrence does not result in the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse obligation to the Issuer or repay any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17obligation relating to borrowed money), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20xiii) shares of preferred stock of a Restricted Subsidiary issued to the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption Company or other acquisition another Restricted Subsidiary; provided that any subsequent issuance or retirement for value transfer of any Equity Interests of the Issuer Capital Stock or any Parentother event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of preferred stock (except to the Company or another Restricted Subsidiary) shall be deemed, in each case held to be an issuance of shares of preferred stock;
(xiv) 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 acquisition or disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any former Person acquiring all or current employeesany portion of such business, officers, directors assets or consultants a Subsidiary for the purpose of financing such acquisition; provided that such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (xiv));
(xv) Indebtedness incurred by the Company or any Restricted Subsidiary pursuant to any Construction Loan, provided that (A) at the time the Construction Loan is entered into or amended to include a new project or projects, as the case may be, the Construction Loan is not in excess of 85% of the estimated total cost of the projects under such Construction Loan taken as a whole, including land at fair market value, interest and soft costs (net of unrestricted deposits) and (B)(1) at the time any Construction Loan is entered into that relates to a single project, there are Valid Purchase Contracts Proceeds in excess of 65% of the maximum Construction Loan amount taken as a whole or (2) at the time any Construction Loan is entered into that relates to more than one project or if an existing Construction Loan is amended to include a new project or projects, there are Valid Purchase Contracts Proceeds in excess of 70% of the maximum Construction Loan amount taken as a whole; provided, that in the event a Default or Event of Default has occurred and is continuing or would be caused thereby, this clause (xv) shall be unavailable to enter into a new Construction Loan or amend an existing Construction Loan to include a new project or projects;
(xvi) Indebtedness incurred by the Company or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon pursuant to Construction Loans existing as of the death, disability or termination of employment Issue Date up to the limits of such Persons Construction Loan existing on the Issue Date
(xvii) the incurrence by the Company and its Restricted Subsidiaries of the Second Lien Notes (and any interest paid-in an aggregate amount at any one time outstanding not to exceed kind through the maximum amount accretion of such acquisitions pursuant to Section 4.11(b)(5interest or the issuance of additional Second Lien Notes);
(21xviii) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness secured by third-priority Liens, which may be in the form of Additional Notes, in an amount up to $200.0 million to be exchanged for certain of the Issuer or Company’s Existing Notes (and any Restricted Subsidiary supported by a letter of credit issued pursuant to interest paid-in kind through the Credit Agreement in a principal amount not in excess of the stated amount accretion of such letter interest or the issuance of creditadditional notes); and
(22xix) contingent liabilities arising out the incurrence by the Company and the Restricted Subsidiaries of endorsements unsecured Indebtedness to be exchanged for certain of checks the Company’s Existing Notes (and other negotiable instruments for deposit any interest paid-in kind through the accretion of such interest or collection in the ordinary course issuance of businessadditional notes). For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09, the Issuer Company will be permitted to classify (and later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, incurrence in any manner that complies with this Section 4.10 at 4.09. Accrual of interest, accretion or amortization of original issue discount or the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09; provided, in each such timecase, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Agreement Facilities on date of this Indenture the Issue Date shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1i) of the second paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)4.09.
Appears in 2 contracts
Sources: Indenture (Valimar Home & Land Company, LLC), Indenture (Wci Communities Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerCompany’s most 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 Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuer or Company and any Subsidiary Guarantor of (A) additional Indebtedness under Credit Facilities (and Facilities, provided that giving effect to such incurrence, the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) of all Indebtedness under Credit Facilities then outstanding under this paragraph (1), together with any Indebtedness incurred pursuant to the following clause (B), does not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Supplemental Indenture to repay any term Indebtedness or debt securities under Credit Facilities (and, in the case of or to repay any revolving credit Indebtedness under a Credit Facility, to Facilities and effect a corresponding commitment reduction thereunder) , in each case pursuant to Section 4.13 4.10 hereof (or, if the Merger has been consummated, $9.0 billion, without such deductions) and less(y) 300% (or, if the Merger has been consummated, 150%) of the Consolidated Cash Flow of the Company and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available, calculated on a pro forma basis in the case manner described in the definition of both “Debt to Cash Flow Ratio” and (B) without duplication, all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the foregoing clause (x) and A); provided, however, that the maximum amount permitted under this clause (y), amounts outstanding 1) shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent that the incurrence of such additional Indebtedness is permitted pursuant to any Qualified Receivables Transactionsof the other provisions of this Section 4.10;
(2) the incurrence by the Issuer or Company and its Restricted Subsidiaries of any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Supplemental Indenture and the related Note Guarantees;
(4) the incurrence by the Issuer 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceedexceed 5.0% of the Company’s Total Assets (or, at any time outstandingif the Merger has been consummated, the greater of (x) $30.0 million or 2.5 billion and (y) 35.0% of Consolidated Tangible Assets the Company’s Total Assets), at the time of the Issuerany such incurrence pursuant to this clause (4);
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Supplemental Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15), (25) or (1626) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Issuer Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereof of the Company, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereofof the Company, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, HoldCo, the Company or a Restricted Subsidiary of the Company, or a Guarantor, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not other than for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock guarantee shall be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of workers’ compensation claims, self-Recourse Debt; providedinsurance obligations, howeverbankers’ acceptances, that if deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any such Indebtedness ceases to be Non-Recourse Debt Guarantees or letters of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Company or any of its Restricted Subsidiaries, (B) in respect to letters of credit issued netting, overdraft protection and other arrangements arising under standard business terms of any bank at which Company or any Restricted Subsidiary maintains an overdraft, cash pooling or other similar facility or arrangement or (C) in respect of the financing of insurance premiums in the ordinary course of 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 or self-insurance; provided, however, provided that, upon if the drawing Merger is consummated, the aggregate principal amount of such letters Indebtedness incurred pursuant to clauses (B) and (C) of credit or the incurrence of such Indebtednessthis paragraph shall not, such obligations are reimbursed within 30 days following such drawing or incurrenceat any time outstanding exceed $250.0 million;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued on behalf of Royal Street in accordance with the Royal Street Agreements or in connection with any Permitted Joint Venture Investment;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Company’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13), at any time outstanding not to exceed the greater of (x) $100.0 million and (y) 1.0% of the Company’s Total Assets (or, if the Merger has been consummated, not to exceed $400.0 million) at the time of such incurrence;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Contribution Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (including Acquired Debt or Indebtedness) used to finance an acquisition of or a merger with another Person, provided that, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Company immediately prior to such transaction;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is ), so long as the amount does not reflected on exceed the balance sheet of gross proceeds actually received by the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary thereof in connection with that such disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(1417) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(1518) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes;
(19) the incurrence by the Company or any Restricted Subsidiary of Indebtedness of Royal Street or its Subsidiaries existing on the date of this Supplemental Indenture (or Indebtedness of Royal Street or its Subsidiaries to the extent comprised of Capital Lease Obligations, which were converted from operating leases existing on the date of this Supplemental Indenture) as a result of Royal Street or its Subsidiaries merging into, or becoming, a Restricted Subsidiary;
(20) the incurrence by the Company or any of the Subsidiary Guarantors 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1520), not to exceed the greater of (x) $75.0 million100.0 million (or, if the Merger has been consummated, $1.0 billion) and (y) 1.0% (or, if the Merger has been consummated, 2.0%) of the Company’s Total Assets as of the time of incurrence;
(1621) the incurrence by the Foreign Company or any Restricted Subsidiaries of the Issuer Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(22) the incurrence by the Company or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Notes and the Note Guarantees issued to current or former employees or directors of Parent, the Company or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (5) of Section 4.07(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(23) the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(24) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Company or any Restricted Subsidiary of such Indebtedness;
(25) if the Merger has been consummated, Indebtedness incurred in connection with the Towers Transaction; and
(26) the incurrence by Restricted Subsidiaries thereunderthat are not Guarantors of Indebtedness; provided, however, that the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (26), when aggregated with the principal amount (or accreted value) of all other Indebtedness then outstanding and incurred pursuant to this clause (26), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1626), does not to exceed the greater of (x) $75.0 million and (y) 0.75% of the Company’s Total Assets at the time of such incurrence (or, if the Merger has been consummated, does not exceed $50.0 250.0 million;
(17) the incurrence of ). The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by a Receivables Subsidiary clause (6) above) that is not recourse contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Issuer or any other Restricted Subsidiary of Notes and the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee on substantially identical terms; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedhowever, that after giving effect no Indebtedness shall be deemed to be contractually subordinated in right of payment to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company or any Restricted Subsidiary supported Guarantor solely by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount virtue of such letter Indebtedness being unsecured or by virtue of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit such Indebtedness being secured on a first or collection in the ordinary course of businessjunior Lien basis. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1x) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).d
Appears in 2 contracts
Sources: Fifth Supplemental Indenture (Metropcs Communications Inc), Sixth Supplemental Indenture (Metropcs Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries that is not a Guarantor to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal an amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed $2.25 billion, less the greater sum of (xi) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 4.10 and less, (ii) the amount of Indebtedness in the case excess of both $150.0 million incurred pursuant to clause (x10) and clause (yof this Section 4.09(b), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date (excluding any Additional Notes) and Subsidiary Guarantees of this Indenture and related Note Guaranteesall Notes;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal), plant or equipment assets used in the business of the Issuer Company or any such Restricted Subsidiary, or in respect of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsa Sale and Leaseback Transaction, in an aggregate principal amount, including and all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $50.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses clause (2), (3), (4), (5), (15) or (163) of above or this clause (5) or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to held by a Restricted Subsidiary that 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the incurrence Company or any Restricted Subsidiary and not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this covenant and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(8) the guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, covenant and could have been incurred (in compliance with this covenant) by the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, Person so guaranteeing such Restricted Subsidiary complies with Section 4.16Indebtedness;
(9) the incurrence by any of the Company’s Foreign Subsidiaries of Indebtedness in an aggregate principal amount, including all Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed (x) $75.0 million at any time outstanding plus (y) $65.0 million at any time outstanding; provided that any Indebtedness under this subclause (y) shall be supported by a letter of credit incurred under one or more Credit Facilities pursuant to clause (1) of this Section 4.09(b);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness pursuant to a Receivables Financing;
(11) 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;
(12) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self-insurance, performance bonds, surety bonds or similar requirements in the ordinary course of business;
(13) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Company 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 Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary shall not be permitted under this clause (13) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (13) shall at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiaries in connection with such disposition; and
(14) 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 Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (14), not to exceed $100.0 million.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this covenant. In addition, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 treated as an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10Indebtedness; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;. Notwithstanding the foregoing, any Indebtedness outstanding pursuant to the Credit Agreement on the date of this Supplemental Indenture will be deemed to have been incurred pursuant to clause (1) of the definition of “Permitted Debt.”
(10d) Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to this covenant shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies.
(e) For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence by of Indebtedness where the Issuer’s Unrestricted Subsidiaries Indebtedness incurred is denominated in a different currency, the amount of Non-Recourse Debtsuch Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided, however, that if any such Indebtedness ceases denominated in a different currency is subject to a Currency Protection Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Protection Agreement. The principal amount of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Protection Agreement, in which case the Permitted Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess, as appropriate, will be determined on the date such Permitted Refinancing Debt is incurred.
(f) Notwithstanding the provisions of clauses (a) through (e) of this Section 4.09, the Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness that is or purports to be Non-Recourse Debt by its terms (or by the terms of an Unrestricted any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Subsidiary, as the case may be, unless such event shall Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinated in the right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of the Company or such Restricted Subsidiary, as the case may be. For purposes of this Section 4.09(f), no Indebtedness will be deemed to constitute an incurrence be subordinated in right of payment to any other Indebtedness by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in solely by virtue of being unsecured or secured by a footnote junior priority Lien or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any virtue of the Issuer’s Restricted Subsidiaries issued to fact that the Issuer holders of such Indebtedness have entered into intercreditor agreements or another Restricted Subsidiary; provided that (i) any subsequent issuance other arrangements giving one or transfer more of any Equity Securities that results such holders priority over the other holders in such Disqualified Stock or preferred stock being the collateral held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstandingthem, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence intercreditor agreements that contain customary provisions requiring turnover by the Foreign Restricted Subsidiaries holders of the Issuer junior prior liens of Indebtedness in an aggregate principal amount at any one time outstanding (with letters proceeds of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, collateral in the event that any proposed Indebtedness meets the criteria of more than one security interests in favor of the categories holders of Permitted Debt described the senior priority in clauses (1) through (22) above, such intended collateral are not perfected or is entitled to be incurred pursuant to Section 4.10(a), invalidated and similar customary provisions protecting the Issuer will be permitted to classify such item holders of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)senior priority liens.
Appears in 1 contract
Sources: First Supplemental Indenture (Scotts Miracle-Gro Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), Indebtedness) and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock(other than the Preferred Stock); providedPROVIDED, however, that the Issuer and the Company or its Restricted Subsidiaries may incur Indebtedness (including Acquired DebtIndebtedness) or issue shares of Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 (A) at least 2.00 2.25 to 11.0 if such date is prior to September 15, 2000 and (B) 2.50 to 1.0 if such date is on or after September 15, 2000, 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 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are . The foregoing provisions will not Guarantors shall not exceed $50.0 million.apply to:
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of Indebtedness under and reimbursement obligations in respect of letters of credit pursuant to the Senior Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) in an aggregate principal amount not to exceed an amount equal to (x) the greater of (x) $385.0 million and (y1) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause and (x2) and clause (y), $150.0 million less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by to permanently reduce the Issuer or any Guarantor total commitments with respect to repay any such Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both 4.10 hereof plus (y) $50.0 million less any outstanding Indebtedness incurred pursuant to clause (xviii) and clause (y), amounts outstanding under any Qualified Receivables Transactionsbelow;
(2ii) the incurrence by the Issuer Company or any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;; 42
(3iii) the incurrence by the Issuer and Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on and the date of this Indenture and related Note Subsidiary Guarantees;
(4iv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or construction financing or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase priceprice or cost of construction or improvement of property used in the business of the Company or such Restricted Subsidiary, or in an aggregate principal amount not to exceed $30.0 million in any fiscal year; PROVIDED that the principal amount (or, in the case of a Capital Lease Obligation, the amount required to be capitalized on a balance sheet under GAAP) of such Indebtedness when incurred shall not exceed the purchase price and/or actual cost of construction or improvement, of property (real or personal)as the case may be, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning to which such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuerincurrence relates;
(5v) the incurrence by the Issuer Company 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, refinance or replace Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b)incurred;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Wholly Owned Restricted Subsidiaries; providedPROVIDED, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer (other than for security purposes) of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Wholly Owned Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or with respect to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and floating rate Indebtedness that do not increase is permitted by the Indebtedness terms of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderthis Indenture to be outstanding;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10viii) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect (in addition to letters Indebtedness permitted by any other clause of credit issued this paragraph) in an aggregate principal amount at any time outstanding not to exceed $50.0 million less the ordinary course amount of business, including, without limitation, letters any Indebtedness incurred pursuant to clause (i)(y) of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrencethis paragraph;
(12ix) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Acquired Indebtedness, PROVIDED that such Indebtedness arising from agreements (A) is not incurred in contemplation of the Issuer acquisition to which it relates and (B) is nonrecourse to the Company and its Restricted Subsidiaries, 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
of their respective assets (13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer acquired Subsidiary and its Subsidiaries, or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemedacquired assets, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13as applicable);
(14x) the incurrence by the Issuer or Company of Indebtedness pursuant to Exchange Debentures described under clause (2) of the definition of Exchange Debentures;
(xi) the Guarantee of any of its Restricted Subsidiaries of obligations Indebtedness otherwise permitted to be incurred pursuant to this Indenture; and
(xii) Obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)bonds.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Parent will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Issuer and the other Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerParent’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Parent and any Guarantor Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Parent and the Guarantors thereunder) not to exceed the greater greatest of (xi) $385.0 million and 650.0 million, (yii) the amount of the Borrowing Base in effect under the Credit Agreement at the time of incurrence, and (iii) $250.0 million plus 35.0% of the Parent’s Adjusted Consolidated Net Tangible Assets (determined as of the date of such incurrence, less, in incurrence after giving pro forma effect to such incurrence and the case application of both clause (x) and clause (ythe proceeds therefrom), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer Parent or any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date Issue Date, any Exchange Notes to be issued by the Issuer pursuant to a Registration Rights Agreement and the incurrence by any Guarantor of this Indenture and related any Note GuaranteesGuarantees thereof;
(4) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries 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, price or cost of construction or design, construction, installation, improvement, deployment, repair, refurbishment or modification of property (real or personal)property, plant or equipment or furniture, fixtures and equipment, in each case, used in the business of the Issuer Parent or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance refinance, replace, defease, discharge or replace otherwise retire for value any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 50.0 million or and (yii) 35.0% of the Parent’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence;
(5) the incurrence by the Issuer Parent 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Parent or any of its Restricted Subsidiaries or any Disqualified Stock of the Parent, in each case that is permitted by this Indenture to be was incurred under Section 4.10(a4.09(a) hereof or clauses clause (2), (3), (4), (5), (15) or (1614) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Parent and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof of the Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Issuer or Parent nor a Restricted Subsidiary thereofof the Parent, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Parent’s Restricted Subsidiaries to the Parent or to any of its Restricted Subsidiaries of any 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 Parent or a Restricted Subsidiary of the Parent; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Parent or a Restricted Subsidiary of the Parent, 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 (7);
(8) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), Oil and Gas Business and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee by the Issuer Parent or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Parent or a Restricted Subsidiary of the Issuer Parent to the extent that the Guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being Guaranteed is subordinated in right of payment to or pari passu with the Notes, then the Guarantee must be subordinated in right of payment or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;
(10) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds, and completion guarantees provided by the Parent or a Restricted Subsidiary of the Parent in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds, obligations or workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Parent or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Parent or any Restricted Subsidiary of the Parent providing for indemnification, adjustment of purchase price, earn outs or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Parent or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Parent or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Parent of any Disqualified Stock 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 or Disqualified Stock issued pursuant to this clause (15), not to exceed, at any one time outstanding, the greater of (i) $75.0 million and (ii) 5.0% of the Parent’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance.
(c) The Parent will not incur, and will not permit the Issuer or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Parent, the Issuer or a Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or 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 Parent, the Issuer or a Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis.
(d) For purposes of determining compliance with this Section 4.09, in the case event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Parent will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under the Credit Agreement outstanding on the Issue Date will be deemed to have been initially incurred on such date in reliance on the exception provided by clause (91) of the definition of “Permitted Debt.” The accrual of interestinterest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock or preferred stock in the form of additional shares or units 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Parent as accrued;
(10) accrued to the incurrence extent required by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing definition of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)term.
Appears in 1 contract
Sources: Indenture (Jagged Peak Energy Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the or preferred stock of a Restricted Subsidiaries may issue preferred stockSubsidiary, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 of a Restricted Subsidiary is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock of a Restricted Subsidiary had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiary of Indebtedness (including letters of credit) under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of:
(i) $800.0 million; and
(ii) an amount equal to the sum of (xA) $385.0 600.0 million and plus (yB) the amount 10% of the Borrowing Base Adjusted Consolidated Net Tangible Assets determined as of the date of the incurrence of such incurrence, less, in Indebtedness after giving pro forma effect to such incurrence and the case application of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsproceeds therefrom;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees to be issued on the date Issue Date (including any increase in principal amount as a result of this Indenture a PIK Payment and any PIK Interest Notes in respect thereof) and (b) the Second Lien Notes and the related Note Guaranteesguarantees thereof issued on the Issue Date (including any increase in principal amount and any PIK interest notes in respect thereof, in each case as a result of a PIK payment);
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $50.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (1611) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business;
(9) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderconsistent with past practice;
(8) 10) the Guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) Permitted Acquisition Indebtedness;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(13) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries;
(14) 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 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 a Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(15) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company 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); and
(16) 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 not to exceed $100.0 million.
(c) The Company will not incur, and will not permit any 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 applicable Note Guarantee on substantially identical terms; 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 or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
(9) the 4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values.
(a))e) 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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds (assets of the fair market value of those non-cash proceeds being measured at specified Person, the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;lesser of:
(13A) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance Fair Market Value of such shares asset at such date of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (W&t Offshore Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuer or Company and any Subsidiary Guarantor of (A) additional Indebtedness under Credit Facilities (and Facilities, provided that giving effect to such incurrence, the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) of all Indebtedness under Credit Facilities then outstanding under this paragraph (1), together with any Indebtedness incurred pursuant to the following clause (B), does not to exceed the greater of (x) $385.0 million 9.0 billion and (y) the amount 150% of the Borrowing Base as Consolidated Cash Flow of the date Company and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available, calculated on a pro forma basis in the manner described in the definition of “Debt to Cash Flow Ratio” and (B) without duplication, all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to the foregoing clause (A); provided, however, that the maximum amount permitted under this clause (1) shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent that the incurrence of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any additional Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) is permitted pursuant to any of the other provisions of this Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.09;
(2) the incurrence by the Issuer or Company and its Restricted Subsidiaries of any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Base Indenture and any related Exchange Notes to be issued in exchange therefor and, in each case, the related Note Guarantees;
(4) the incurrence by the Issuer 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 million or 2.5 billion and (y) 35.0% of Consolidated Tangible Assets the Company’s Total Assets, at the time of the Issuerany such incurrence pursuant to this clause (4);
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15), (24) or (1625) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Issuer Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Issuer Company or a Restricted Subsidiary thereof of the Company, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Issuer Company or a Restricted Subsidiary thereofof the Company, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 Parent, the Company or a Restricted Subsidiary of the Company or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, the Company or a Restricted Subsidiary of the Company, or a Guarantor, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not other than for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Company or any of its Restricted Subsidiaries, (B) in respect of netting, overdraft protection and other arrangements arising under standard business terms of any bank at which the Company or any Restricted Subsidiary maintains an overdraft, cash pooling or other similar facility or arrangement or (C) in respect of the financing of insurance premiums in the ordinary course of business, provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (B) and (C) of this paragraph shall not, at any time outstanding exceed $250.0 million;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued in connection with any Permitted Joint Venture Investment;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Company’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13), at any time outstanding not to exceed $400.0 million at the time of such incurrence;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Contribution Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (including Acquired Debt or Indebtedness) used to finance an acquisition of or a merger with another Person, provided that, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Company immediately prior to such transaction;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary thereof in connection with such disposition;
(17) the incurrence by the Company or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, in upon the case drawing of a Guarantee such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(18) the incurrence by the Company or any Restricted Subsidiary of Indebtedness to the extent that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the DT Notes;
(919) the incurrence by the Company or any of the Subsidiary Guarantors 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 (19), not to exceed the greater of (x) $1.0 billion and (y) 2.0% of the Company’s Total Assets as of the time of incurrence;
(20) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(21) the incurrence by the Company or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Notes and the Note Guarantees issued to current or former employees or directors of Parent, the Company or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an amount equal to the amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (5) of Section 4.07(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(22) the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(23) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Company or any Restricted Subsidiary of such Indebtedness;
(24) Indebtedness incurred in connection with the Towers Transaction; and
(25) the incurrence by Restricted Subsidiaries that are not Guarantors of Indebtedness; provided, however, that the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (25), when aggregated with the principal amount (or accreted value) of all other Indebtedness then outstanding and incurred pursuant to this clause (25), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (25), does not exceed $250.0 million. The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by clause (6) above) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary 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 shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Subsidiary Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of such Indebtedness being secured on a first or junior Lien basis. For purposes of (x) determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (25) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09 and (y) determining the amount of Indebtedness that may be incurred pursuant to clause (1)(A)(y) of Section 4.09(b), the Company may elect, pursuant to an Officers’ Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (and any refinancing with respect thereto) as being incurred at such time, in which case any subsequent incurrence of Indebtedness under such commitment or refinancing, as the case may be, shall not be deemed, for purposes of this calculation, to be an incurrence at such subsequent time. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles or the application thereof, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).St
Appears in 1 contract
Sources: Indenture (T-Mobile US, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company (prior to the Guarantee Effective Date) and the Parent (from and after the Guarantee Effective Date) will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company (prior to the Guarantee Effective Date) and the Parent (from the Guarantee Effective Date) will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer CompanyParent or the Company, as applicable may incur Indebtedness (including Acquired Debt), the Company (prior to the Guarantee Effective Date) or the Parent (from the Guarantee Effective Date) may issue Disqualified Stock, and the Restricted Subsidiaries Subsidiary Guarantors (and the Company, following the Guarantee Effective Date) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s (or the Parent’s from the Guarantee Effective Date) most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Parent, the Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed (as of the date of incurrence of Indebtedness under this clause (1) and after giving pro forma effect to such incurrence and the application of net proceeds therefrom) the greater of (xA) $385.0 750.0 million and (yB) the amount 25% of the Borrowing Base Consolidated Total Assets as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and Disqualified Stock existing on the date of this Indenture;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the related Note Guarantees (other than any Additional Notes and related Note Guarantees);
(4) the incurrence by the Issuer Parent, the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or financings, purchase money obligationsobligations or Disqualified Stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Parent, the Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount or accreted liquidation preference, including all Permitted Refinancing Indebtedness incurred or issued to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness or Disqualified Stock incurred or issued pursuant to this clause (4), not to exceed, exceed the greater of $175.0 million or 7.50% of Consolidated Total Assets at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer Parent, the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness or the issuance by the Company (prior to the Guarantee Effective Date) or the Parent (from the Guarantee Effective Date) of Disqualified Stock (including additional Disqualified Stock issued to pay premiums, retirement costs, accrued dividends and fees and expenses in connection therewith) in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease, discharge or replace extend any Indebtedness or Disqualified Stock (other than intercompany IndebtednessIndebtedness or Disqualified Stock) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (1512), (16), (18), (19) or (1624) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company (or, following the Guarantee Effective Date, the Parent) or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company (or, following the Guarantee Effective Date, the Parent) and any of its Restricted Subsidiaries; provided, however, that:
(aA) if if:
(1) the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that ; and
(2) the payee is not the Company or a Guarantor, then 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness incurred under this clause (6) being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof and the Company (iias applicable) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))Companythereof; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Interest Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor of Indebtedness its Restricted Subsidiaries of Priority Lien Debt, Junior Lien Debt or unsecured Indebtedness, under letters of credit or any one or more indentures or other Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Facilities, in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed (as of any date of incurrence of Indebtedness under this clause (1) and after giving pro forma effect to the greater application of (x) $385.0 million and (y) the amount of the Borrowing Base as any net proceeds therefrom within 35 days of the date of such incurrence, less, in ) the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsPriority Lien Cap;
(2) the incurrence by the Issuer Company or any Guarantors of its Restricted Subsidiaries of Junior Lien Debt or unsecured Indebtedness, under letters of credit or any one or more indentures or other Credit Facilities, in an aggregate principal amount at any one time outstanding under this clause (2) not to exceed (as of any date of incurrence of Indebtedness under this clause (2) and after giving pro forma effect to the application of any net proceeds therefrom within 35 days of the Existing Indebtednessdate of such incurrence) $550.0 million;
(3) the incurrence by the Issuer and Company or any of its Restricted Subsidiaries of Permitted ABL Debt, or unsecured Indebtedness, under letters of credit or any one or more indentures or other Credit Facilities, in an aggregate principal amount at any one time outstanding under this clause (3) not to exceed (as of any date of incurrence of Indebtedness represented by under this clause (3) and after giving pro forma effect to the Notes to be issued on application of any net proceeds therefrom within 35 days of the date of such incurrence) the Permitted ABL Lien Total Cap; provided that the aggregate principal amount of Permitted ABL Debt of the Company and its Domestic Subsidiaries at any one time outstanding under this Indenture and related Note Guaranteesclause (3) shall not exceed the Permitted ABL Lien U.S. Cap;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of the Existing Indebtedness (other than letters of credit in existence on the Issue Date, which will be deemed to be incurred under clause (22) below);
(5) the incurrence by any Guarantor of the Note Guarantees to be issued on the Issue Date or pursuant to Section 4.16 hereof;
(6) 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (46), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 75.0 million or and (yb) 32.5% of Consolidated Tangible Assets the consolidated total assets of the IssuerCompany and its Restricted Subsidiaries (measured at the time of such incurrence);
(57) the incurrence by the Issuer 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 refinance, replace, defease or replace Indebtedness discharge any Indebtedness, Disqualified Stock or preferred stock, including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay accrued interest, fees and expenses, including premiums, incurred in connection therewith (other than intercompany Indebtedness, Disqualified Stock or preferred stock) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (24)-(7), (3), (4), (514), (15) or (1623) of this Section 4.10(b4.09(b);
(6) 8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the such Guarantor’s Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (68);
(9) 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 (9);
(710) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 11) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes or any Note Guarantee, in then the case of a Guarantee of any Restricted Subsidiary that is not a Guarantorguarantee must be subordinated or pari passu, as applicable, to the Notes and/or such Restricted Subsidiary complies with Section 4.16Note Guarantee, as applicable, to the same extent as the Indebtedness guaranteed;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(1012) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, bid, appeal, surety and customs bonds, completion guarantees and similar obligations in the ordinary course of business;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(14) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (14), 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 $75.0 million;
(15) Indebtedness or preferred stock of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of or was otherwise acquired by the Company); provided that the aggregate principal amount at any time outstanding pursuant to this clause (15), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), does not exceed $50.0 million;
(16) the incurrence by a Receivables Subsidiary of Indebtedness in a Permitted Securitization Program that is without recourse to the Company or to any of its other Restricted Subsidiaries or their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any of its Subsidiaries, other than pursuant to representations, warranties, covenants and indemnities customary for such transactions) and is not guaranteed by any such Person, in an aggregate amount at any one time outstanding under this clause (16) not to exceed $200.0 million as of the date of such incurrence;
(17) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Company or any business, assets or Capital Stock of a Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(18) Indebtedness consisting of Indebtedness issued by the Company or a Restricted Subsidiary to any current or former officer, director, employee or consultant of the Company or any of its Subsidiaries (or any permitted transferees of such persons), in each case to finance the purchase or redemption of Equity Interests of the Company to the extent described in Section 4.07(b)(4) hereof;
(19) Indebtedness owed on a short-term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries;
(20) Indebtedness incurred by a Restricted Subsidiary of the Company in connection with bankers’ acceptances, discounted bills of exchange or the discounting or factoring of receivables for credit management purposes, in each case incurred or undertaken in the ordinary course of business on arm’s length commercial terms on a recourse basis;
(21) 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, 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;
(1222) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements letters of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, credit in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected existence on the balance sheet Issue Date and additional letters of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness credit in an aggregate principal amount at any one time outstanding under this clause (22) not to exceed $250.0 million (with such letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder); and
(23) the incurrence or issuance by the Company or any of its Restricted Subsidiaries of additional Indebtedness (including letters of credit and reimbursement obligations with respect thereto), Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or amount, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1623), not to exceed the greater of (a) $50.0 million;250.0 million or (b) 5.0% of the consolidated total assets of the Company and its Restricted Subsidiaries (measured at the time of such incurrence).
(17c) the incurrence of The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness by a Receivables Subsidiary (including Permitted Debt) that is not recourse 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 Issuer or any other Restricted Subsidiary of Notes and the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee on substantially identical terms; provided, thathowever, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. Notwithstanding any of the foregoing to the contrary, the aggregate amount Company will not issue, and will not permit any Guarantor to issue, any Series of Indebtedness under this clause Priority Lien Debt with a maturity date on or prior to October 15, 2014, or any Series of Junior Lien Debt with a maturity date on or prior to September 15, 2015, to any Person who is, at the time of issuance of such Priority Lien Debt or Junior Lien Debt, as applicable either (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed i) an Affiliate of a beneficial owner of Existing Notes in exchange for any of such beneficial owner’s Existing Notes or (ii) a beneficial owner of Existing Notes either for cash or in exchange for any such Existing Notes. If the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness Company or any Guarantor issues (x) of the Issuer Priority Lien Debt with a maturity date on or a Restricted Subsidiary incurred prior to finance an acquisition October 15, 2014 or (y) Persons that are acquired by the Issuer Junior Lien Debt with a maturity date on or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedprior to September 15, that after giving effect 2015, to any such transaction, including the incurrence and/or repayment or retirement of any IndebtednessPerson, the Fixed Charge Coverage Ratio would be equal to Company or greater than the Fixed Charge Coverage Ratio immediately such Guarantor shall, prior to issuing such transaction;Priority Lien Debt or Junior Lien Debt, as applicable, obtain a confirmation from such Person that such Person does not beneficially own any Existing Notes.
(19d) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, 4.09,
(1) in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2223) of Section 4.09(b) above, or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 4.09; provided that the Initial Notes will be deemed to be outstanding under Section 4.09(b)(1) hereof and the Second Lien Notes issued on the Issue Date will be deemed to be outstanding under Section 4.09(b)(2) hereof;
(2) at such time. the time of incurrence, the Company will be entitled to divide and classify an item of Indebtedness under in more than one of the Credit Agreement types of Indebtedness described in Sections 4.09(a) and 4.09(b) hereof (except with respect to the Initial Notes and the Second Lien Notes issued on date the Issue Date, as provided in Section 4.09(d)(1) above);
(3) letters of this Indenture shall credit will be deemed to have been incurred a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder;
(4) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included; and
(5) with respect to any U.S. dollar-denominated restriction on such date pursuant to Section 4.10(b)(1). Any the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 denominated in a foreign currency shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).calculat
Appears in 1 contract
Sources: Indenture (Unisys Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 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 the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 50.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer Company and the Guarantors of Indebtedness represented by the Senior Notes and the Senior Note Guarantees;
(5) 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, case incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, Subsidiaries (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets), in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (45), not to exceed, exceed $20.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(56) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under by Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (156), (17) or (1618) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(78) 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 (8);
(9) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 10) the Guarantee guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of bankers’ acceptances, performance, bid and surety bonds and completion guarantees provided in the ordinary course of business;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business;
(13) the incurrence of Indebtedness arising from agreements of the Company or any of its Restricted Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or a Restricted Subsidiary, other than the Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided, however, that:
(a) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise 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 such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and Restricted Subsidiaries in connection with such disposition;
(14) the incurrence of Indebtedness owed to any Person in connection with worker’s compensation, self-insurance, health, disability or other employee benefits or property, casualty or liability insurance provided by such Person to the Company or any of its Restricted Subsidiaries, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business and consistent with past practices;
(15) pledges, deposits or payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licenses, contractors, franchisees or customers of obligations, other than Indebtedness, made in the ordinary course of business;
(16) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to directors, officers or employees of the Company or any of its Restricted Subsidiaries in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the Notes, is not secured by any assets of the Company or any of its Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the Notes, in an aggregate principal amount at any time outstanding not to exceed $2.0 million;
(17) 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 renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (17), not to exceed $20.0 million;
(18) the incurrence of Indebtedness by the Company or any Restricted Subsidiary to finance the acquisition (including, without limitation, by way of a merger) of Capital Stock of any Person engaged in, or assets used or useful in, a Permitted Business; provided thatthat the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred 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 Indebtedness had been incurred at the beginning of such four-quarter period; and
(19) the incurrence by the Company of Indebtedness in the form of Additional Notes in connection with the issuance of ▇▇▇▇ or, if there are no ▇▇▇▇ outstanding on the date of such issuance, the issuance of the Company’s Class A Common Stock (and in each case, the incurrence of the related Note Guarantees in respect of such Additional Notes by the Guarantors), provided that (a) no Default or Event of Default has occurred and is continuing at the time of such issuance or would be caused thereby, (b) the ratio of the aggregate principal amount of such Additional Notes over the number of additional shares of the Company’s Class A Common Stock issued contemporaneously therewith shall not exceed (i) the equivalent ratio with respect to the ▇▇▇▇ outstanding immediately prior to such issuance, or (ii) if there are no ▇▇▇▇ outstanding immediately prior to such issuance, the equivalent ratio with respect to the ▇▇▇▇ outstanding on the date of this Indenture, and (c) the Company uses the proceeds of such issuance solely to repurchase shares of Class B Common Stock issued on or before the date of this Indenture from holders thereof in accordance with the Securities Holders Agreement. For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09 and such item of Indebtedness will be treated as having been incurred pursuant to only such clause or clauses to which it has been reclassified or pursuant to Section 4.09(a), as the case may be. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in account principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided4.09. Notwithstanding any other provision of this Section 4.09, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a))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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance date of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (Polaner Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Parent will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Parent’s Fixed Charge Coverage Ratio for the Issuer’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 1.1 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(ba) The provisions of Section 4.10(a6.03(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(22) Indebtedness incurred under the Loan Documents and any Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (1);
(23) the incurrence by the Issuer Parent and its Restricted Subsidiaries of the Existing Indebtedness and any Indebtedness that is incurred pursuant to or in lieu of a commitment in existence as of the Closing Date;
(24) the incurrence by the Borrower or any Guarantor of (A) Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (3) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Parent and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 150.0 million and (yB) the amount Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under Credit Facilities secured on a junior priority basis by some or all of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any collateral securing Indebtedness under Credit Facilities contemplated by clause (and, A) of this clause (3) in an aggregate principal amount at any one time outstanding under this clause (3)(B) (with letters of credit being deemed to have a principal amount equal to the case maximum potential liability of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction the Parent and its Restricted Subsidiaries thereunder) not to exceed $150.0 million; provided that no Indebtedness or letters of credit incurred pursuant to Section 4.13 and less, in the case of both this clause (x3) and clause (y), amounts outstanding under is secured by a Lien on any Qualified Receivables Transactionsproperty or asset that constitutes Collateral;
(225) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness represented by by, or incurred in connection with, Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing (or reimbursing the Parent or any of its Restricted Subsidiaries for) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment (including without limitation airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Issuer Parent or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any ; provided that no Indebtedness incurred pursuant to this clause (4), not to exceed, at ) is secured by a Lien on any time outstanding, the greater of (x) $30.0 million property or (y) 3% of Consolidated Tangible Assets of the Issuerasset that constitutes Collateral;
(526) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of (A) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture Agreement to be incurred under Section 4.10(a6.03(a) or clauses (2), (3), (4), (5), (156), (13), (21), (24) or (1625) of this Section 4.10(b)6.03(b) and (B) Permitted Refinancing Indebtedness secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets replacing, renewing, refunding, extending, refinancing, defeasing or discharging any other Indebtedness of the Parent or any of its Restricted Subsidiaries that was secured by aircraft, airframes, engines, spare parts, flight simulators, flight training devices or other assets;
(627) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness, Disqualified Stock or preferred stock (including Acquired Debt) (A) as part of, or to finance, the acquisition (including by way of merger) of any Permitted Business, (B) incurred in connection with, or as a result of, the merger, consolidation or amalgamation of any Person that owns a Permitted Business with or into the Parent or a Restricted Subsidiary of the Parent, or into which the Parent or a Restricted Subsidiary of the Parent is merged, consolidated or amalgamated, or (C) that is an outstanding obligation of a Person that owns a Permitted Business at the time that such Person is acquired by the Parent or a Restricted Subsidiary of the Parent and becomes a Restricted Subsidiary of the Parent;
(28) the incurrence by the Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and Parent and/or any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Borrower or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Borrower or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notesthen due, in the case of the IssuerBorrower, or the Note Guaranteeall Guaranteed Obligations then due, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof of the Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Parent or a Restricted Subsidiary thereofof the Parent, shall will be deemed, in each casecase under this clause (B), to constitute an incurrence of such Indebtedness by the Issuer Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(729) the issuance by any Restricted Subsidiaries of the Parent to the Parent 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 Parent or a Restricted Subsidiary of the Parent; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Parent or a Restricted Subsidiary of the Parent, 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 (8);
(30) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 31) the Guarantee guarantee by the Issuer Parent or any Restricted Subsidiary of the Parent of Indebtedness of the Issuer Parent or a Restricted Subsidiary of the Issuer Parent to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.106.03; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Loans, in then such guarantee must be subordinated or pari passu, as applicable, to the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16same extent as the Indebtedness guaranteed;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(1032) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness constituting or 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 claims, self-insuranceinsurance obligations, or bankers’ acceptances, performance bonds and surety bonds in the ordinary course of business (including without limitation in respect of customs obligations, landing fees, taxes, airport charges, overfly rights and any other Indebtedness with respect obligations to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceairport and governmental authorities);
(1233) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing house transfers of funds;
(34) Indebtedness (A) constituting credit support or financing from aircraft or engine manufacturers or their affiliates or (B) incurred to finance the acquisition of aircraft, airframes, engines, spare parts, flight simulators, flight training devices, quick engine change kits or other operating assets; provided that no Indebtedness may be incurred in reliance on subsection (B) of this clause (13) more than 24 months after such acquisition; provided, further, that no such Indebtedness incurred in reliance on this clause (13) may be secured by a Lien on any property or asset that constitutes Collateral;
(35) Indebtedness issued to current or former directors, consultants, managers, officers and employees and their spouses or estates (a) to purchase or redeem Capital Stock of the Parent issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $4,000,000 in any 12-month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Parent;
(36) reimbursement obligations in respect of standby or documentary letters of credit or banker’s acceptances that are not secured by Liens on any property or asset that constitutes Collateral;
(37) surety and appeal bonds that are not secured by Liens on any property or asset that constitutes Collateral and that do not secure judgments that constitute an Event of Default;
(38) Indebtedness of the Parent or any of its Restricted Subsidiaries to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Parent and its Restricted Subsidiaries;
(39) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Parent or to any other Restricted Subsidiary of the Parent or their assets (other than such Receivables Subsidiary and its assets and, as to the Parent or any other Restricted Subsidiary of the Parent, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(40) the incurrence of Indebtedness of the Parent or any of its Restricted Subsidiaries owed to one or more Persons in connection with the financing of insurance premiums in the ordinary course of business;
(41) [Reserved]
(42) the incurrence by the Borrower or any Guarantor of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) secured by a Lien on the Collateral that is junior to the Liens securing the Obligations, and Permitted Refinancing Indebtedness that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (21), in an aggregate principal amount at any one time outstanding under this clause (21) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Borrower and any Guarantor thereunder and including all other Junior Secured Debt that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed the Junior Lien Cap;
(43) Indebtedness arising from agreements of the Issuer Parent or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that all such Indebtedness shall at no time exceed the gross proceeds proceeds, including non-cash proceeds (the fair market value Fair Market Value of those such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Parent or any of its Restricted Subsidiary Subsidiaries in connection with that such disposition;
(1344) Indebtedness of the issuance of Disqualified Stock Parent or preferred stock by any of the Issuer’s its Restricted Subsidiaries issued to consisting of take-or-pay obligations contained in supply agreements entered into in the Issuer ordinary course of business and consistent with past practices of the Parent or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a applicable Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Parent;
(1445) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of obligations additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in respect full in cash of performance all Obligations and surety bonds Guaranteed Obligations on terms not materially less favorable to the Lenders than those customary at the time of incurrence (determined in good faith by a senior financial officer of the Parent) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu with all Obligations and completion Guarantees Guaranteed Obligations and convertible into common stock of the Parent; provided by that the Issuer aggregate principal amount of Indebtedness incurred pursuant to clauses (A) and (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or such Restricted Subsidiary in the ordinary course of business;discharge any Indebtedness incurred pursuant to this clause (24), does not exceed $250.0 million at any time outstanding; and
(1546) the incurrence by the Issuer Parent or any Guarantor of its Restricted Subsidiaries of additional Indebtedness that is not secured by a Lien on any property or asset that constitutes Collateral 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, extend, defease or replace discharge any Indebtedness incurred pursuant to this clause (1625), not to exceed $50.0 150.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessoutstanding. For purposes of determining compliance with this Section 4.106.03, in the event that any proposed if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (12) through (2225) above, of Section 6.03(b) hereof or is entitled to be incurred pursuant to Section 4.10(a)6.03(a) hereof, the Issuer Parent will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 6.03; provided that (A) all Junior Secured Debt will at such time. Indebtedness under the Credit Agreement on date of this Indenture shall all times be deemed to have been incurred in reliance on such date pursuant the exception provided by clause (21) of the definition of “Permitted Debt” and (B) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to Section 4.10(b)(1). Any Indebtedness be incurred under Credit Facilities pursuant to clause clauses (1), (3) of paragraph or (b21) of this Section 4.10 shall be deemed 6.03(b). None of the following will constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant Section 6.03:
(1) the accrual of interest or preferred stock dividends;
(2) the accretion or amortization of original issue discount;
(3) the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms;
(4) the reclassification of preferred stock as Indebtedness due to have been incurred a change in accounting principles; and
(5) the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 6.03, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Parent or any provisions under any Credit Facility that provide that such Indebtedness is of its Restricted Subsidiaries may incur pursuant to this Section 6.03 shall not be deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).exceeded solely as a result of fluctuations in exc
Appears in 1 contract
Sources: Credit and Guaranty Agreement (Republic Airways Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, :
(1) that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Issuer and any other Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock Preferred Stock had been issued, as the case may be, at the beginning of such four-four quarter period; provided, however, that and
(2) if the aggregate amount of Indebtedness or Disqualified Stock that may to be incurred under this paragraph by is Senior Secured Indebtedness, the Issuer and any Restricted Subsidiary may incur such Senior Secured Indebtedness if the Consolidated Senior Secured Net Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred is less than 4.75 to 1.0 as at any date of incurrence prior to 31 December 2017 and less than 4.50 to 1.0 thereafter, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the Indebtedness had been incurred at the beginning of such four quarter period. Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
may only incur Indebtedness pursuant to this Section 4.09(a) if on a pro forma basis (b) Section 4.10(a) will not prohibit the incurrence of any including a pro forma application of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (ynet proceeds therefrom), the aggregate amount of all Net Proceeds Indebtedness of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness that are not Guarantors incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (xSection 4.09(a) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall would not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)£12.5 million.
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and Facilities, which may be senior in right of payment to the incurrence by the Guarantors of Guarantees thereof) Notes, 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions50.0 million;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that for any such Indebtedness outstanding at any time under this clause (5), on the date that such Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to clause (a) above after giving effect to the incurrence of such Indebtedness pursuant to this clause (5).
(6) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(aclause (a) above or clauses (2), (3), (4), (5), (156) or (1613) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Wholly-Owned Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any i)any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Wholly-Owned 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 Issuer Company or a Wholly-Owned Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(78) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Wholly-Owned 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 Wholly-Owned 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 Wholly-Owned 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 (8);
(9) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred and cash management obligations in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 10) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance and surety bonds in the ordinary course of business;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; and
(13) the incurrence by the Company or the Guarantors of additional Indebtedness in an aggregate principal amount at any time outstanding, not to exceed $35.0 million. The Company will not incur, and will not permit any 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 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 Company or such Guarantor solely by virtue of being unsecured or by virtue of holders of secured Indebtedness having entered into inter-creditor agreements giving one or more of such holders priority over the other holders in the Collateral held by them or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Sections 4.09(b)(1) through (13) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a))1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with the original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance date of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if (a) the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0 and (b) the Asset Coverage Ratio as of the last day of the fiscal quarter for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or Disqualified Stock or preferred stock is issued, as the case may be, would have been not more than 0.75 to 1.0, determined in the case of each of clauses (a) and (b) 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 the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xa) $385.0 140.0 million and (yb) the amount 20.0% of the Borrowing Base Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness (whether represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each caseor otherwise), incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation, development, repair or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any Restricted Subsidiary (together with improvements, additions, accessions and contractual rights related primarily thereto) and related financing costs, and Attributable Debt in respect of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetssale and leaseback transactions, in an aggregate outstanding principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xa) $30.0 10.0 million or and (yb) 31.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are not incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of unemployment self-Recourse Debt; providedinsurance, howeverhealth, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiarydisability, such event shall be deemed to constitute an incurrence of Indebtedness public liability or other benefits obligations or bid, plugging or abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement 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;
(12) any obligation of a Person in respect of a farm-in agreement or similar arrangement whereby such Person agrees to pay all or a share of the drilling, completion or other expenses of an exploratory or development well (which agreement may be subject to a maximum payment obligation, after which expenses are shared in accordance with the working or participation interest therein or in accordance with the agreement of the parties) or perform the drilling, completion or other operation on such well in exchange for an ownership interest in an oil or natural gas property;
(13) the incurrence by the Company or any Restricted Subsidiary of in-kind obligations with respect relating to letters of credit issued net oil or natural gas balancing positions arising in the ordinary course of business, including, without limitation, letters of credit or any final settlement thereof in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect cash if required pursuant to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceterms thereof;
(1214) the incurrence by the Issuer Company or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and the Restricted Subsidiaries;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, holdbacks, earn outs, or similar obligations, in each case, case incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer 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 in a transaction permitted by this Indenture, provided that such acquisition; provided that:
(a) such Indebtedness obligation is not reflected as a liability on the face of the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a))Subsidiary; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
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Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee enter into a guarantee of or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any of the following Disqualified Stock (collectively, “Permitted Debt”):
(1) the incurrence and guarantee by the Issuer Company or any Guarantor Restricted Subsidiary, of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum remaining potential liability of the Issuer and the Guarantors Company or any Restricted Subsidiary thereunder) not to exceed the greater of (x) $385.0 125.0 million and (y) less the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to permanently repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y4.12(c)(1)(B), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this the Indenture and the exchange notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Attributable Debt in connection with a Sale and leaseback transaction or Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing or reimbursing all or any part of the purchase price, price or cost of construction design, development, construction, installation, expansion, repair or improvement, improvement of property (either real or personal), plant or equipment or other fixed or capital assets used or useful in the business of the Issuer Company or any of its Restricted SubsidiariesSubsidiaries (in each case, whether through the direct purchase of such assets or the Capital Stock purchase of Equity Interests of any Person owning such assets), which incurrence occurs within 365 days of such purchase, design, development, construction, installation, expansion, repair or improvement, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at exceed $15.0 million outstanding as of any time outstanding, the greater date of incurrence of Indebtedness pursuant to this clause (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer4);
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.11(a) or clauses clause (2), (3), (4), (5), (15) or (1619) of this Section 4.10(b4.11(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness (or the guarantees of any such intercompany Indebtedness) between or among the Issuer and Company or any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Guarantor, such Indebtedness (other than Indebtedness incurred in the ordinary course in connection with the cash or tax management operations of the Company and its Subsidiaries) 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall then such Indebtedness will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by any of the Issuer Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of Hedging Obligations shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that are incurred results in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time preferred stock being held by a Person other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not 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 (7);
(8) Hedging Obligations that are not incurred for speculative purposes but for the purpose of (a) fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding; (b) fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (c) fixing or hedging commodity price risk, including the price or cost of raw materials, emission rights, manufactured products or related commodities, with respect to any commodity purchases or sales;
(9) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be incurred by another provision of this Section 4.10covenant; provided thatthat if the Indebtedness being guaranteed is subordinated in right of payment to the Notes, then the Guarantee must be subordinated in right of payment to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, unemployment or other insurance or self-insurance obligations, health, disability or other benefits to employees or former employees and their families, bankers’ acceptances, performance, completion and surety bonds, completion guarantees and similar obligations in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from customary agreements of the Company or any such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or sale or other disposition of any business, assets or Capital Stock of the Company or any of its Restricted Subsidiaries, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock;
(13) the incurrence of contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(14) the incurrence of Indebtedness consisting of guarantees of loans or other extensions of credit to or on behalf of current or former officers, directors, employees, or consultants of the Company, any of its Restricted Subsidiaries, or any direct or indirect parent of the Company for the purpose of permitting such Persons to purchase Capital Stock of the Company or any direct or indirect parent of the Company; provided that the aggregate amount of such Indebtedness and Investments made pursuant to clause (8) of the definition of “Permitted Investments” may not exceed $5.0 million at any one time outstanding;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness solely in respect of premium financing or similar deferred payment obligations with respect to insurance policies purchase in the ordinary course of business;
(16) the incurrence of Indebtedness in the ordinary course of business under any agreement between the Company or any of its Restricted Subsidiaries and any commercial bank or other financial institution relating to treasury, depository and cash management services, credit card arrangements, debit card arrangements or automated clearinghouse transfers of funds;
(17) the incurrence of Indebtedness of the Company or any of its Restricted Subsidiaries consisting of take-or-pay obligations entered into in the ordinary course of business;
(18) the incurrence by the Company or any of its Restricted Subsidiaries of Obligations in respect of bankers’ acceptances, tender, bid, judgment, appeal, performance or governmental contract bonds and completion guarantees, surety, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(19) Indebtedness, Disqualified Stock or preferred stock of Persons that are acquired by the Company or any of its Restricted Subsidiaries or merged into the Company or a Restricted Subsidiary of the Company in accordance with the terms of the Indenture; provided that such Indebtedness, Disqualified Stock or preferred stock is not incurred in contemplation of such acquisition or merger; provided further that after giving pro forma effect to such acquisition or merger, the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant;
(20) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Disqualified Stock 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 (20), not to exceed $20.0 million;
(21) Indebtedness of the Company or any of its Restricted Subsidiaries incurred to finance the replacement (through construction, acquisition, lease or otherwise) of one or more Vessels and any assets that shall become Notes Priority Collateral, upon a total loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to or use of such Vessel (provided that such loss, destruction, condemnation, confiscation, requisition, seizure, forfeiture or other taking of title to or use of such Vessel was covered by insurance or resulted in the actual payment of compensation, indemnification or similar payments to such Person (collectively, a “Total Loss”)) in an aggregate amount no greater than the Ready for Sea Cost for such replacement Vessel, in each case, less all compensation, damages and other payments (including insurance proceeds other than in respect of business interruption insurance) actually received by the Company or any of its Restricted Subsidiaries from any Person in connection with the Total Loss in excess of amounts actually used to repay Indebtedness secured by the Vessel subject to the Total Loss;
(22) Indebtedness of the Company or any of its Restricted Subsidiaries incurred in relation to (i) maintenance, repairs, refurbishments and replacements required to maintain the classification of any of the Vessels owned, leased, time chartered or bareboat chartered to or by the Company or any of its Restricted Subsidiaries, (ii) drydocking of any of the Vessels owned or leased by the Company or any of its Restricted Subsidiaries for maintenance, repair, refurbishment or replacement purposes in the ordinary course of business; and (iii) any expenditures which will or may be reasonably expected to be recoverable from insurance on such Vessels;
(23) Indebtedness of the Company or any Guarantor (which may include, for the avoidance of doubt, deferred or installment payment obligations), in an aggregate amount not to exceed $50.0 million at any one time outstanding, incurred in order to repurchase, repay, refinance, redeem, defease or otherwise retire for value the obligations of the Company or any of its Restricted Subsidiaries with respect to ship financing arrangements in existence on the Issue Date; and
(24) Unsecured Indebtedness of the Company issued as a ▇▇▇▇▇ Act Restricted Payment, consisting of debt securities having neither (i) a Stated Maturity nor (ii) any due date for the payment of any installment of principal, in either case, that is earlier than one year after the Stated Maturity of the Notes.
(c) Any Indebtedness incurred under a Credit Facility that is allocated to Section 4.11(b)(1) shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, other than pursuant to “cash sweep” provisions or any similar provisions under any Credit Facility that provide that such Indebtedness is deemed to be repaid daily (or otherwise periodically).
(d) For purposes of determining compliance with this Section 4.11, in the case event that an item of proposed Indebtedness or Disqualified Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (24) of this Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify all or a Guarantee portion of such item of Indebtedness or Disqualified Stock on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness or Disqualified Stock (based on circumstances existing on the date of such reclassification), in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
this covenant, except that Indebtedness outstanding under the ABL Facility on the date of the Indenture will at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the second paragraph of this covenant above. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10covenant; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this covenant, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this covenant shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); andfluctuations in exchange rates or currency values.
(be) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer The amount of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).Inde
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee enter into any guarantee of, or otherwise become directly or indirectly liable, contingently or otherwise, with respect to for (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that that
(1) the Issuer and any Restricted Subsidiary of the Restricted Subsidiaries Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and any Restricted Subsidiary of the Restricted Subsidiaries Issuer may issue preferred stock, Preferred Stock if the Fixed Charge Coverage Ratio of the Issuer for the Issuer’s most 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 Preferred Stock or preferred stock is issued would have been at least 2.00 to 11.00, or
(2) OpCo and any Restricted Subsidiary of OpCo may incur Indebtedness (including Acquired Debt) and any Restricted Subsidiary of OpCo may issue Preferred Stock if the Fixed Charge Coverage Ratio of OpCo for OpCo’s most 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 Preferred Stock is issued would have been at least 2.00 to 1.00, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the “Coverage Ratio Exception”), as if the additional Indebtedness had been incurred Disqualified or the Preferred Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness under the Existing Secured OpCo Notes, the New Secured OpCo Notes and one or more Credit Agreements together with the incurrence by of the Issuer or any Guarantor of Indebtedness under Credit Facilities (guarantees thereunder and the incurrence by the Guarantors issuance and creation of Guarantees thereof) in an aggregate principal amount at any one time outstanding letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the maximum potential liability of the Issuer face amount thereof) and the Guarantors thereunderother Indebtedness, up to an aggregate principal amount, together with amounts outstanding under a Qualified Securitization Financing incurred pursuant to clause (17) below, not to exceed at any one time outstanding the greater of (xA) $385.0 1,550.0 million and (yB) the maximum aggregate principal amount of the Borrowing Base (as of the date of incurrence of any such incurrence, less, Indebtedness and after giving pro forma effect to the incurrence thereof and the application of the net proceeds therefrom (or as of the date of the initial borrowing of such Indebtedness after giving pro forma effect to the incurrence of the entire committed amount of such Indebtedness)) that can be incurred without exceeding (x) a Senior Secured Indebtedness to EBITDA Ratio for the Issuer of 3.00 to 1.00 or (y) in the case of both Indebtedness incurred pursuant to this subclause (B) by OpCo and its Restricted Subsidiaries, a Senior Secured Indebtedness to EBITDA Ratio for OpCo of 3.00 to 1.00 (it being understood that for purposes of determining compliance under this clause (x) and 1), any Indebtedness incurred under this clause (y), 1) (whether or not secured) will be included in the aggregate amount of all Net Proceeds Senior Secured Indebtedness for purposes of Asset Sales, applied by calculating the Issuer or any Guarantor Senior Secured Indebtedness to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (yEBITDA Ratio), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of and the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture Issue Date or the Exchange Notes;
(3) Existing Indebtedness, including the Unsecured OpCo Notes (other than Indebtedness described in Sections 4.10(b)(1), (2) and related Note Guarantees(7));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented Subsidiary and Preferred Stock issued by Capital Lease Obligationsa Restricted Subsidiary to finance the purchase, mortgage financings lease 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, improvement of property (real or personal), plant ) or equipment that is used or useful in the business of the Issuer or any of its Restricted Subsidiaries, a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, ) in an aggregate principal amountamount that, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness and/or Preferred Stock then outstanding and incurred to refund, refinance or replace any Indebtedness incurred issued pursuant to this clause (4), does not to exceed, at any time outstanding, exceed the greater of (x) $30.0 50.0 million or and (y) 34.0% of Consolidated Tangible Assets of the IssuerAssets;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, including without limitation, limitation letters of credit in respect of workers’ compensation claims claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims claims, health, disability or self-other employee benefits or property casualty or liability insurance or self insurance; provided, however, that, provided 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;
(126) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such a Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees 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; provided that:
(a) that such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that such balance sheet for purposes of this clause (aclause)); and;
(b7) Indebtedness of the maximum assumable liability in respect Issuer owed to and held by any Restricted Subsidiary or Indebtedness of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received a Restricted Subsidiary owed to and without giving effect to any subsequent changes in value) actually received held by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided provided, however, that (iA) any subsequent issuance or transfer of any Equity Securities Capital Stock or any other event that results in any such Disqualified Stock Restricted Subsidiary ceasing to be a Restricted Subsidiary or preferred stock being held by a Person other than any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary thereof and (iiSubsidiary) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the issuer thereof and (B) if the Issuer is the obligor on such Indebtedness (other than any Existing Indebtedness) owing to a Restricted Subsidiary that is not OpCo or an OpCo Notes Guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations of the Issuer with respect to the Notes;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or a Restricted Subsidiary) shall be deemed in each case to be an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)Preferred Stock;
(149) Hedging Obligations of the incurrence Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting (A) interest rate risk with respect to any Indebtedness that is permitted to be incurred by the terms of this Indenture, (B) exchange rate risk with respect to any currency exchange or (C) commodity price risk;
(10) obligations in respect of self insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Issuer or any of its Restricted Subsidiaries of Subsidiary or obligations in respect of performance letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(11) Indebtedness of the Issuer or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount or liquidation preference which, when aggregated with the principal amount and surety bonds liquidation preference of all other Indebtedness and completion Guarantees provided by Preferred Stock then outstanding and incurred pursuant to this clause (11), does not at any one time outstanding exceed the greater of $250.0 million and 15.0% of Consolidated Tangible Assets (it being understood that any Indebtedness or Preferred Stock incurred pursuant to this clause (11) shall cease to be deemed incurred or outstanding for purposes of this clause (11) but shall be deemed incurred for the purposes of Section 4.10(a) from and after the first date on which the Issuer or such Restricted Subsidiary in the ordinary course of businesscould have incurred such Indebtedness or Preferred Stock under Section 4.10(a) without reliance on this clause (11));
(15a) the incurrence any guarantee by the Issuer or any Guarantor a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as (in an aggregate principal amount (or accreted value, as applicable) at the case of any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17such Indebtedness) the incurrence of such Indebtedness by such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any guarantee by a Restricted Subsidiary of Indebtedness or other obligations of the Issuer;
(13) Indebtedness or Preferred Stock of the Issuer or any Restricted Subsidiary that serves to extend, replace, refund, refinance, renew or defease any Indebtedness incurred as permitted by Section 4.10(a) and Section 4.10(b)(2), (3), (4), (13) and (14) or any Indebtedness issued to so extend, replace, refund, refinance, renew or defease such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”); provided that such Refinancing Indebtedness (A) has a Receivables Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, (B) to the extent such Refinancing Indebtedness refinances Indebtedness that is subordinated to the Notes, such Refinancing Indebtedness is subordinated to the Notes at least to the same extent as the Indebtedness being refinanced or refunded, (C) shall not include (x) Indebtedness or Preferred Stock of a Subsidiary that is not recourse to OpCo or an OpCo Notes Guarantor that refinances Indebtedness or Preferred Stock of the Issuer or any other Restricted Subsidiary (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (other than Standard Securitization UndertakingsD) incurred shall not be in connection a principal amount (or, if issued with original issue discount, an aggregate issue price) in excess of the principal amount of, premium, if any, and accrued interest on, the Indebtedness being replaced, refunded, refinanced, renewed or defeased plus any fees, premiums, underwriting discounts, costs and expenses relating to such extension, replacement, refunding, refinancing, renewal or defeasance, and (E) shall not have a Qualified Receivables Transaction; Stated Maturity date prior to the Stated Maturity of the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased and provided, thatfurther, the aggregate amount that subclauses (A), (B) and (E) of Indebtedness under this clause (17), when aggregated with all 13) will not apply to any refunding or refinancing of any Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1)any Credit Agreement;
(1814) the incurrence Indebtedness or Preferred Stock of Indebtedness (xA) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition of any assets (including Capital Stock), business or Person or (yB) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged or consolidated with or into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transactionacquisition, merger or consolidation (including the incurrence and/or repayment of such Indebtedness) (x) either (1) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception or retirement of any Indebtedness, (2) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or consolidation or (y) in the case of Indebtedness or Preferred Stock incurred by OpCo or any of its Restricted Subsidiaries, or Indebtedness or Preferred Stock of Persons that are acquired by or merged or consolidated with or into OpCo or any of its Restricted Subsidiaries, either (1) the Fixed Charge Coverage Ratio of OpCo would be equal to or greater than immediately prior to such transactionacquisition, merger or consolidation or (2) OpCo would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception;
(1915) contingent liabilities Indebtedness arising out from the honoring by a bank or financial institution of endorsements of checks and other negotiable instruments for deposit a check, draft or collection similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(2016) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to the any Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and;
(17) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary of the Issuer other than a Securitization Subsidiary (except for Standard Securitization Undertakings);
(18) (A) Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product Financing Indebtedness;
(19) Contribution Indebtedness;
(20) Indebtedness of Foreign Subsidiaries of the Issuer, provided, however, that the aggregate principal amount of Indebtedness incurred under this clause (20), when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (20), does not exceed the greater of (x) $100.0 million and (y) 8.5% of the Consolidated Tangible Assets of the Foreign Subsidiaries;
(21) Indebtedness consisting of promissory notes issued by the Issuer or any of its Restricted Subsidiaries to future, current or former, employees, directors and consultants and their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests permitted by Section 4.11.
(22) contingent liabilities arising out Indebtedness of endorsements the Issuer or any of checks and other negotiable instruments for deposit its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or collection (ii) take or pay obligations contained in supply arrangements, in each case incurred in the ordinary course of business. ; and
(23) Indebtedness of the Issuer or any of its Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or joint venture in the ordinary course of business.
(c) For purposes of determining compliance with this Section 4.10, 4.10 (a) in the event that an item of Indebtedness or Preferred Stock (or any proposed Indebtedness portion thereof) meets the criteria of more than one of the categories of Permitted Debt or Preferred Stock described in clauses (1) through (2223) above, above or is entitled to be incurred pursuant to Section 4.10(a)the Coverage Ratio Exception, the Issuer Issuer, in its sole discretion, will be permitted to classify or reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, or Preferred Stock (or any portion thereof) in any manner that complies with this Section 4.10 at and will only be required to include the amount and type of such time. Indebtedness or Preferred Stock (or portion thereof) in one of the above clauses or paragraphs; provided that Indebtedness outstanding on the Effective Date under the Revolving Credit Agreement on date of this Indenture Agreement, the Existing Secured OpCo Notes and the New Secured OpCo Notes shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness classified as incurred under Credit Facilities pursuant to clause (1) of paragraph Section 4.10(b), and not under the Coverage Ratio Exception; and (b) at the time of this Section 4.10 shall incurrence, the Issuer will be deemed for purposes entitled to divide and classify an item of this covenant to have been incurred on Indebtedness in more than one of the date such types of Indebtedness was described in the first incurred until such Indebtedness is actually repaidand second paragraphs above.
(d) Accrual of interest or dividends, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowedthe accretion of accreted value, repaid and reborrowed daily (or otherwise periodically).the a
Appears in 1 contract
Sources: Indenture (Warner Music Group Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; providedPROVIDED, howeverHOWEVER, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any Guarantor may incur Indebtedness or issue Disqualified Stock (and WCC RE Holdings LLC and Atlantic Shores Healthcare, Inc. may guarantee Indebtedness of the Restricted Subsidiaries Company under the Credit Agreement) and any Foreign Subsidiary may issue preferred stockincur Indebtedness, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) So long as no Default shall have occurred and be continuing or would be caused thereby, Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of Disqualified Stock, as set forth below (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1i) the incurrence by the Issuer or Company and any Guarantor of its Restricted Subsidiaries of Indebtedness under the Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Agreement in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunderunder this clause 4.09(b)(i) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence150.0 million, less, in the case of both clause (x) and clause (y), LESS the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor Restricted Subsidiary to repay any Indebtedness under the Credit Facilities (Agreement and, in if the case of any Indebtedness repaid is revolving credit Indebtedness under a Credit FacilityIndebtedness, to effect a corresponding commitment reduction thereunder) correspondingly reduce commitments with respect thereto, pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10;
(2ii) the incurrence by the Issuer or Company and any Guarantors of the its Restricted Subsidiaries of Existing Indebtedness;
(3iii) the incurrence by the Issuer and its Restricted Subsidiaries Company of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and related Note Guaranteesany Guarantees thereof by any Guarantor;
(4iv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (44.09(b)(iv), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer 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 is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2ii), (3iii), (4v), (5), (15) or (16xi) of this Section 4.10(b4.09(b);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; providedPROVIDED, howeverHOWEVER, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall of the Company; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (64.09(b)(vi);
(7vii) the incurrence by the Issuer 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 Indebtedness that is permitted by the terms of this Indenture to be outstanding or for hedging foreign currency exchange risk, in each case to the extent the Hedging Obligations are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for any speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderpurpose;
(8) viii) the Guarantee by the Issuer Company or any Restricted Subsidiary Guarantor of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9ix) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; providedPROVIDED, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10x) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness, including Indebtedness constituting reimbursement obligations with respect to represented by letters of credit issued for the account of the Company or any Restricted Subsidiary, incurred in respect of workers' compensation claims, self-insurance obligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business, including, without limitation, letters ; PROVIDED that the underlying obligation to perform is that of credit the Company or its Restricted Subsidiaries and not that of the Company's Unrestricted Subsidiaries; PROVIDED FURTHER that such underlying obligation is not in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceborrowed money;
(12xi) the incurrence by the Issuer Company or any of its the Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (15xi), not to exceed $75.0 30.0 million;
(16xii) the incurrence by the Foreign Company or any of its Restricted Subsidiaries of the Issuer of Indebtedness, including but not limited to Indebtedness in an aggregate principal amount at any one time outstanding (with represented by letters of credit being deemed to have a principal amount equal to for the maximum potential liability account of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer Company or any other Restricted Subsidiary Subsidiary, arising from agreements of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred to finance an acquisition or assumed in connection with the disposition of any business, assets or Equity Interests 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 Equity Interests for the purpose of financing such acquisition;
(yxiii) Persons that are acquired the incurrence by the Issuer Company or any Restricted Subsidiary of Indebtedness arising from the honoring by a bank or merged into other financial institution of a check, draft or similar instrument (except in the Issuer or Restricted Subsidiary in accordance with the terms case of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19daylight overdrafts) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection drawn against insufficient funds in the ordinary course of business;, PROVIDED that such Indebtedness is extinguished within five Business Days of incurrence; or
(20xiv) the incurrence by issuance of preferred stock of a Restricted Subsidiary to the Issuer of Indebtedness Company that is pledged to effect secure the repurchaseCredit Agreement, redemption or other acquisition or retirement for value of PROVIDED that any Equity Interests of the Issuer or any Parent, subsequent transfer that results in each case such preferred stock being held by any former a Person other than the Company or current employees, officers, directors or consultants a Restricted Subsidiary will be deemed to constitute an issuance of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or preferred stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5permitted by this clause (xiv);.
(21c) For purposes of determining compliance with any restriction on the incurrence of Indebtedness of where the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to Indebtedness incurred is not denominated in U.S. dollars, the Credit Agreement in a principal amount not in excess of the stated amount of such letter Indebtedness will be the U.S. Dollar Equivalent determined on the date of creditincurrence of such Indebtedness; andPROVIDED, HOWEVER, that if any such Indebtedness not denominated in U.S. dollars is subject to a Hedging Obligation with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Hedging Obligation. The principal amount of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (i) such U.S. Dollar Equivalent was determined based on a Hedging Obligation, in which case the Permitted Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (ii) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess will be determined on the date such Permitted Refinancing Indebtedness is Incurred.
(22d) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xiv) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred in reliance on the date exception provided in Section 4.09(b)(i).
(e) The Company shall not, and shall not permit any 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 Indebtedness was first incurred until Guarantor unless such Indebtedness is actually repaidalso contractually subordinated in right of payment to the Notes or such Guarantee on substantially identical terms; PROVIDED, notwithstanding HOWEVER, that no Indebtedness of the Company or any provisions under any Credit Facility that provide that such Indebtedness is Guarantor will be deemed to be borrowed, repaid and reborrowed daily (contractually subordinated in right of payment to any other Indebtedness of the Company or otherwise periodically)any Guarantor solely by virtue of being unsecured.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall ACEP will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its their Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 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 the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or ACEP and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer ACEP and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 50.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Asset Sale Proceeds of Asset Sales, Sales applied by the Issuer ACEP or any Guarantor of its Restricted Subsidiaries since the Issuance Date to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x4.10(b)(1) and clause (y), amounts outstanding under any Qualified Receivables Transactionshereof;
(2) the incurrence by the Issuer or any Company and the Guarantors of Indebtedness represented by the Existing IndebtednessNotes and the related Note Guarantees to be issued on the Issuance Date and the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement;
(3) the incurrence by ACEP and the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price, price or cost of acquisition, construction or improvement, improvement of property (real or personal)property, plant or equipment used or to be used in the business of the Issuer ACEP or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsGuarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (43), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(54) the incurrence by ACEP and the Issuer or any of its Restricted Subsidiaries Guarantors 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 was incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (510), (1511) or (1614) of this Section 4.10(b4.09(b);
(65) the incurrence by the Issuer or any of ACEP and its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer ACEP and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor ACEP is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and;
(b) if a Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of its Note Guarantee; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer ACEP or a Restricted Subsidiary thereof of ACEP and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer ACEP or a Restricted Subsidiary thereof, of ACEP shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer ACEP or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, that in the case of a Guarantee of any Restricted Subsidiary clauses (a) and (b), that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, no restriction on the payment of principal, interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that intercompany Indebtedness shall at no time exceed be required by such subordinated terms except during the gross proceeds including non-cash proceeds (the fair market value occurrence and continuation of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that dispositiona Default or Event of Default;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries that is not a Guarantor to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, howeverprovided further, that the aggregate amount of Indebtedness or (including Acquired Debt), Disqualified Stock or preferred stock that may be incurred under this paragraph or issued, as applicable, by Restricted Subsidiaries that are not Guarantors Guarantors, pursuant to this Section 4.09(a), shall not exceed $50.0 million500.0 million at any one time outstanding.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal an amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed $2.80 billion, less the greater sum of (xi) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 4.10 and less, (ii) the amount of Indebtedness in the case excess of both $500.0 million incurred pursuant to clause (x10) and clause (y), amounts outstanding under any Qualified Receivables Transactionsbelow;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on (excluding any Additional Notes), the date Subsidiary Guarantees of this Indenture all Notes, the 2026 Notes, the Subsidiary Guarantees of all 2026 Notes, the 2029 Notes, Subsidiary Guarantees of all 2029 Notes, the 2031 Notes and related Note GuaranteesSubsidiary Guarantees of all 2031 Notes;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance 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, price or cost of construction or improvement, improvement of property (real or personal), plant or equipment assets used in the business of the Issuer Company or any such Restricted Subsidiary, or in respect of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsa Sale and Leaseback Transaction, in an aggregate principal amount, including and all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $400.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses clause (2), (3), (4), (5), (15) or (163) of above or this clause (5) or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to held by a Restricted Subsidiary that 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the incurrence Company or any Restricted Subsidiary and not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this covenant and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(8) the guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, covenant and could have been incurred (in compliance with this covenant) by the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, Person so guaranteeing such Restricted Subsidiary complies with Section 4.16Indebtedness;
(9) the incurrence by any of the Company’s Foreign Subsidiaries of Indebtedness in an aggregate principal amount, including all Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed (x) $200.0 million at any time outstanding plus (y) $200.0 million at any time outstanding; provided that any Indebtedness under this subclause (y) shall be supported by a letter of credit incurred under one or more Credit Facilities pursuant to clause (1) of this Section 4.09(b);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness pursuant to a Receivables Financing;
(11) 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;
(12) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self-insurance, performance bonds, surety bonds or similar requirements in the ordinary course of business;
(13) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Company 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 Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary shall not be permitted under this clause (13) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (13) shall at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiaries in connection with such disposition; and
(14) 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 Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (14), not to exceed $750.0 million.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this covenant. In addition, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 treated as an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10Indebtedness; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;. Notwithstanding the foregoing, any Indebtedness outstanding pursuant to the Credit Agreement on the date of this Indenture will be deemed to have been incurred pursuant to clause (1) of the definition of “Permitted Debt.”
(10d) Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to this covenant shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies.
(e) For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence by of Indebtedness where the Issuer’s Unrestricted Subsidiaries Indebtedness incurred is denominated in a different currency, the amount of Non-Recourse Debtsuch Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided, however, that if any such Indebtedness ceases denominated in a different currency is subject to a Currency Protection Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Protection Agreement. The principal amount of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Protection Agreement, in which case the Permitted Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess, as appropriate, will be determined on the date such Permitted Refinancing Debt is incurred.
(f) Notwithstanding the provisions of clauses (a) through (e) of this Section 4.09, the Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness that is or purports to be Non-Recourse Debt by its terms (or by the terms of an Unrestricted any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Subsidiary, as the case may be, unless such event shall Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinated in the right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of the Company or such Restricted Subsidiary, as the case may be. For purposes of this Section 4.09(f), no Indebtedness will be deemed to constitute an incurrence be subordinated in right of payment to any other Indebtedness by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in solely by virtue of being unsecured or secured by a footnote junior priority Lien or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any virtue of the Issuer’s Restricted Subsidiaries issued to fact that the Issuer holders of such Indebtedness have entered into intercreditor agreements or another Restricted Subsidiary; provided that (i) any subsequent issuance other arrangements giving one or transfer more of any Equity Securities that results such holders priority over the other holders in such Disqualified Stock or preferred stock being the collateral held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstandingthem, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence intercreditor agreements that contain customary provisions requiring turnover by the Foreign Restricted Subsidiaries holders of the Issuer junior prior liens of Indebtedness in an aggregate principal amount at any one time outstanding (with letters proceeds of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, collateral in the event that any proposed Indebtedness meets the criteria of more than one security interests in favor of the categories holders of Permitted Debt described the senior priority in clauses (1) through (22) above, such intended collateral are not perfected or is entitled to be incurred pursuant to Section 4.10(a), invalidated and similar customary provisions protecting the Issuer will be permitted to classify such item holders of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)senior priority liens.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Issuers and the Restricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xi) $385.0 1,800.0 million and (yii) the amount 35.0% of the Borrowing Base as of Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 125.0 million or and (yii) 33.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (1514) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of self-Recourse Debt; providedinsurance obligations or bid, howeverplugging and abandonment, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiaryappeal, such event shall be deemed to constitute an incurrence of Indebtedness reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred Subsidiary in a transaction permitted by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionthis Indenture; provided that:
(a) that such Indebtedness obligation is not reflected as a liability on the face of the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;Permitted Acquisition Indebtedness; and
(15) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million;
200.0 million and (16ii) the incurrence by the Foreign Restricted Subsidiaries 5.0% of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability Company’s Adjusted Consolidated Net Tangible Assets determined as of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment date of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessissuance. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2215) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien 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 payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to have been incurred the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date such of determination; and
(2) the amount of the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)of the other Person.
Appears in 1 contract
Sources: Indenture (Parsley Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent Entity and the Company will not, and shall the Company will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer Company will not and will not permit the Parent Entity to issue any Disqualified Stock and the Issuer Parent Entity and the Company will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness or issue preferred stock, if at the Fixed Charge Coverage Ratio for time (the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date "Calculation Time") on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued issued, as the case may be, the Consolidated Fixed Charge Coverage Ratio of the Parent Entity at the Calculation Time would have been at least 2.00 no less than 2.25 to 1, 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 the Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that Parent Entity's most recently ended four fiscal quarters for which internal financial statements are not Guarantors shall not exceed $50.0 millionavailable immediately preceding the Calculation Time.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (xa) $385.0 125.0 million and (yb) the amount 75% of the Borrowing Base as net book value of the date inventory and 85% of such incurrence, less, in the case net book value of both clause (x) the accounts receivables of the Company and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under Guarantors determined on a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsconsolidated basis;
(2) the incurrence by the Issuer or any Guarantors Parent Entity, the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Initial Notes to be issued on and the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through in each case incurred no later than 180 days after the direct purchase date of assets such acquisition or the Capital Stock date of any Person owning completion of such assetsconstruction, installation or improvement, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 25.0 million or (y) 3and 3.0% of Consolidated Tangible Assets of the Issuerat any time outstanding;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (1514) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Guarantor, such Indebtedness must be unsecured (or if secured, such security interest must be expressly subordinated and junior to the Liens securing the Notes and the Note Guarantees on terms no less favorable to the Holders than the terms under the Second Lien Intercreditor Agreement) 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall of the Company; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was is permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations, bankers' acceptances, performance and surety bonds, completion guarantees or similar arrangements in the ordinary course of business;
(11) the incurrence by the Company of Indebtedness or Obligations represented by or incurred pursuant to the Environmental Indemnity Agreements;
(12) Indebtedness of the Company or any Restricted Subsidiary arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, provided that such Indebtedness is satisfied within five Business Days of incurrence;
(13) Indebtedness arising from agreements of the Company or a Restricted Subsidiary or any Parent Entity providing for indemnification, adjustment of purchase price, earn out or other similar Obligations, in each case, incurred or assumed in connection with the acquisition or Disposition of any business, assets or a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed 20% of the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with a Disposition;
(14) the incurrence by the Company or any of the Guarantors 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 (14), not to exceed $20.0 million; and
(15) Indebtedness of the Parent Entity, the Company and its Restricted Subsidiaries in existence on the date of this Indenture represented by the Second Lien Notes and the related note guarantees. The Company will not incur, and will not permit any 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 applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being secured on a junior Lien basis. For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence and will only be required to include the amount and type of such Indebtedness in one of the above clauses, although the Company may divide and classify an item of Indebtedness in more than one of the types of Indebtedness, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under Credit Facilities outstanding on the Issue Date will initially be deemed to have been incurred on the Issue Date in reliance on the exception provided by clause (91) of the definition of "Permitted Debt." Indebtedness represented by the Second Lien Notes and the related Guarantees will be deemed to have been incurred in reliance on the exception provided by clause (15) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Equity Interests as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a))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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;date of determination, and
(13B) the issuance of Disqualified Stock or preferred stock by any amount of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Person.
Appears in 1 contract
Sources: Indenture (Appleton Papers Inc/Wi)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 to 11.00, 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 the Disqualified Stock or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the its Guarantors thereunder) not to exceed the greater greatest of (xa) $385.0 million and 725.0 million, (yb) the amount 35.0% of the Borrowing Base Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence and (c) the Borrowing Base in effect under the Credit Agreement at the time of incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note Guaranteeshereof;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations or other Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price, other acquisition cost or cost of construction design, construction, installation, development, repair or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted SubsidiariesSubsidiaries (together with improvements, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsadditions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease, discharge or replace otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed at any time outstanding, outstanding the greater of (xa) $30.0 50.0 million or and (yb) 34.0% of Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence;
(5) the incurrence by the Issuer 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 refinance, replace, defease, discharge or replace otherwise retire for value, in whole or in part, any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture hereby to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (8), (13), (15) or (16) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(ai) if the Issuer Company or any Guarantor is the obligor on such IndebtednessIndebtedness and the payee is not the Company or a Guarantor, and if such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness must be unsecured and 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; and
(bii) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall be deemedof the Company, in each casecase of clause (i) or clause (ii), will be deemed to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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, in each case, will be deemed to constitute an issuance of such Preferred Stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.10covenant; provided thatthat if the Indebtedness being guaranteed is subordinated to the Notes, in then the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with must be subordinated to the same termsextent as the Indebtedness guaranteed (or, and at the payment of dividends on 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 Company’s election, to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrueda greater extent);
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of Non-Recourse Debt; providedIndebtedness in respect of self- insurance obligations and other social security or similar legislation, howeverold age pension or public liability obligations, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiarystatutory obligations, such event shall be deemed to constitute an incurrence of Indebtedness by government contracts, trade contracts, regulatory obligations, leases, utility contracts and similar obligations, bid, plugging and abandonment, appeal, reimbursement, performance, tender, surety and 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 any Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as, supporting any or issued to assure payment or performance of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation, health, disability or other benefits, unemployment or other insurance claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, contribution, adjustment of purchase price price, earn-outs, holdbacks, deferred compensation or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not transaction permitted by this clause (13)hereby;
(14) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations Indebtedness in respect of performance and surety bonds and completion Guarantees provided by the Issuer financing of insurance premiums with the providers of such insurance or such Restricted Subsidiary their Affiliates in the ordinary course of business;
(15) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Subsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred Disqualified Stock issued pursuant to this clause (16), not to exceed the greater of (i) $50.0 million75.0 million and (ii) 6.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer Company or any other of its Restricted Subsidiary Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionordinary course of business; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);and
(18) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of Indebtedness (x) of the Issuer or a Restricted any Unrestricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Joint Venture but only if such liability is the result of (a) the Company’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms Joint Venture and not as guarantor of this Indenture; providedsuch Indebtedness if, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtednessincurrence, the Fixed Charge Coverage Ratio would be equal to aggregate principal amount of all Indebtedness incurred under this clause (18)(a) and then outstanding does not exceed $25.0 million, or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19b)(i) contingent liabilities arising out of endorsements of checks Customary Recourse Exceptions and other negotiable instruments for deposit or collection in the ordinary course of business;
(20ii) the incurrence pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Issuer Company or such Restricted Subsidiary to secure Non-Recourse Debt. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of Indebtedness payment to effect the repurchase, redemption or any other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company or any Restricted Subsidiary supported by a letter such Guarantor unless such Indebtedness is also contractually subordinated in right of credit issued pursuant payment to the Credit Agreement Notes and the applicable Note Guarantee on substantially identical terms (or, at the Company’s election, to a greater extent); provided, however, that no Indebtedness will be considered contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with different collateral or to a principal amount not in excess greater or lesser extent or priority or by virtue of the stated amount structural subordination, maturity date or being guaranteed by less than all guarantors of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessIndebtedness. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(1) through (2218) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such timecovenant. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of this Indenture shall which Notes are first issued and authenticated hereunder will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or dividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on Indebtedness in the form of additional Indebtedness, the payment of dividends on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock, the obligation to pay a premium in respect of Indebtedness or Preferred Stock or Disqualified Stock arising in connection with the issuance of a notice of redemption or the making of a mandatory change of control offer or asset sale offer for such Indebtedness or Preferred Stock or Disqualified Stock, increases in the amount of Indebtedness outstanding solely as a result of fluctuations in exchange rates or currency values, unrealized losses or charges in respect of Hedging Obligations, and the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, in each case will be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant covenant; provided that the amount thereof is included in Fixed Charges of the Company as accrued to have been incurred on the date extent required by the definition of such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)term.
Appears in 1 contract
Sources: Indenture (Viper Energy Partners LP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer OI Group shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) with respect to any Indebtedness (including Acquired Debt), and the Issuer will OI Group shall not issue any Disqualified Stock and the Issuer will OI Group shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer OI Group and the any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and may issue Disqualified Stock and the Restricted Subsidiaries may issue or preferred stock, if the Fixed Charge Coverage Ratio for the IssuerOI Group’s most 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 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the preferred stock had has been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.13 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer OI Group or any Guarantor its Restricted Subsidiaries of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer OBGC and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater $4.5 billion (of (x) which not more than $385.0 million and (y) the amount of the Borrowing Base as of the date 3.0 billion of such incurrenceIndebtedness shall be incurred by Restricted Subsidiaries (for the avoidance of doubt, less, in other than the case of both clause (xCompany) and clause (ythat are not Guarantors), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or OI Group and any Guarantors Restricted Subsidiary of the OI Group of Existing Indebtedness;
(3) the incurrence by OI Group, the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be and the related Guarantees issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer OI Group 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3exceed 3.0% of Consolidated Tangible Assets of the IssuerAssets;
(5) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred to finance all or any part of the Issuer purchase price or cost of construction or improvement of property, plant or equipment used in the business of OI Group or such Restricted Subsidiary, 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 clause (5), not to exceed 5.0% of Tangible Assets, as measured after giving effect to such transaction;
(6) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness in exchange for, or the proceeds of which are or shall be used to refund, refinance or replace, OI Inc.Parent Indebtedness, provided that, except with respect to the OI Inc. 2018 Debentures which are not subject to this proviso, such new Indebtedness would qualify as Permitted Refinancing Indebtedness had the OI Inc.Parent Indebtedness being exchanged, refunded, refinanced or replaced been an obligation of OI Group or such Restricted Subsidiary;
(7) the incurrence by OI Group or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are or shall be used to refund, refinance or replace Indebtedness (other than intercompany Intercompany Indebtedness) that is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.13 or clauses (2), (3), (4), (5), (156) or (167) of this Section 4.10(b)paragraph;
(6) 8) the incurrence by the Issuer OI Group or any of its Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Issuer OI Group and any of its Restricted SubsidiariesSubsidiaries and with respect to OI Group only, between OI Group and any Parent or between OI I▇▇.▇▇▇▇▇ and Survivor Party; provided, however, that:
(a) if OI Group, the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Guarantor; and;
(b) any incurrence by OI Group of Intercompany Indebtedness to OI Inc.any Parent or Survivor Party after the Issue Date shall be in exchange for cash loans or advances from OI Inc.any Parent or Survivor Party, as applicable, in the ordinary course of business consistent with past practices; and
(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer OI Group or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer OI Group or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer OI Group or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the incurrence by the Issuer OI Group or any of its Restricted Subsidiaries of Hedging Obligations Obligations;
(10) provided that are incurred so long as no Default shall have occurred or be continuing or would be caused thereby, the incurrence by any Foreign Subsidiary of OI Group of Indebtedness in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk an aggregate principal amount (or to reverse or amend any such agreements previously made for such purposes)accreted value, and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding as applicable) at any time other than as a result of fluctuations in interest ratesoutstanding, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereundernot to exceed $300.0 million;
(8) 11) (i) the Guarantee by the Issuer Company or any of the Guarantors of Indebtedness of OI Group or any Restricted Subsidiary of OI Group and (ii) the Guarantee by any Foreign Subsidiary other than the Company of Indebtedness of the Issuer OI Group or a any Restricted Subsidiary of the Issuer OI Group, in each case, that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.13;
(912) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, terms and the payment of dividends on 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 4.13 or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10Stock; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer OI Group as accrued;
(1013) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer OI Group or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (1513), not to exceed $75.0 300.0 million;
(14) Indebtedness arising from agreements of OI Group or a Restricted Subsidiary of OI Group 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 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; provided, however, that (i) such Indebtedness is not reflected on the balance sheet of OI Group or any such Restricted Subsidiary of OI Group (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) the maximum assumable liability in respect of all such Indebtedness that is permitted to be incurred pursuant to this clause (14) 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 OI Group and its Restricted Subsidiaries in connection with such disposition;
(15) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred or deemed incurred or cash consideration received from the sale of accounts receivable by OI Group or any of its Restricted Subsidiaries or a special purpose vehicle established by any of them to purchase and sell such receivables;
(16) obligations in respect of performance and surety bonds and completion guarantees provided by OI Group or any of its Restricted Subsidiaries in the ordinary course of business;
(17) Indebtedness incurred by OI Group 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 other Indebtedness with respect to reimbursement type 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; and
(18) the incurrence by the Foreign OI Group or any of its Restricted Subsidiaries of the Issuer of Indebtedness Acquired Debt, in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder)outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1618), not to exceed $50.0 million;
(17) the incurrence 10.0% of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; providedTangible Assets, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that as measured after giving effect to the transaction for which the Acquired Debt was incurred. The Company shall not incur any such transaction, Indebtedness (including Permitted Debt) after the incurrence and/or repayment or retirement Issue Date that is contractually subordinated in right of payment to any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter Company unless such Indebtedness is also contractually subordinated in right of credit issued pursuant payment to the Credit Agreement in a principal amount not in excess Notes on substantially similar terms; provided, however, that no Indebtedness of the stated amount Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. OI Group shall not, and shall not permit any Guarantor to, incur any Indebtedness (including Permitted Debt) after the Issue Date that is contractually subordinated in right of payment to any other Indebtedness of OI Group or the Guarantors, as the case may be, unless such letter Indebtedness is also contractually subordinated in right of creditpayment to the obligations under the Notes or Guarantees of the Notes on substantially similar terms; and
(22) contingent liabilities arising out provided, however, that no Indebtedness of endorsements OI Group or the Guarantors shall be deemed to be contractually subordinated in right of checks and payment to any other negotiable instruments for deposit Indebtedness of OI Group or collection in the ordinary course Guarantors solely by virtue of businessbeing unsecured. For purposes of determining compliance with this Section 4.104.13, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2218) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.13, the Issuer will Company shall be permitted to divide and classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, incurrence in any manner that complies with this Section 4.10 at 4.13, or later reclassify all or a portion of such timeitem of Indebtedness. Indebtedness under Credit Facilities outstanding on the Credit Agreement on date of this Indenture Issue Date shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Permitted Debt above.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt)Indebtedness, and the Issuer Parent will not issue any Disqualified Stock and the Issuer will not permit any of its the Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries may incur Parent will be entitled to Incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and any Restricted Subsidiary will be entitled to Incur Indebtedness or issue Preferred Stock if, on the Restricted Subsidiaries may issue preferred stockdate of such Incurrence or issuance and after giving effect thereto on a pro forma basis, if the Fixed Charge Coverage Ratio for the Issuer’s most 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 be at least 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million1.0.
(b) Notwithstanding Section 4.10(a) 4.09(a), the Parent and the Restricted Subsidiaries will not prohibit the incurrence of be entitled to Incur any or all of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of (A) Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal Incurred pursuant to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer and any of its Restricted SubsidiariesAgreement; provided, however, that:, immediately after giving effect to any such Incurrence, the aggregate principal amount of all Indebtedness Incurred under this clause (1) and then outstanding, together with $1.2 billion aggregate principal amount of Indebtedness, consisting of $684.0 million aggregate principal amount of Notes and $516.0 million aggregate principal amount of additional 2027 Secured Notes (the “Additional 2027 Secured Notes”) issued in the Transactions and any Refinancing Indebtedness in respect thereof, does not exceed $5.6 billion; provided, that (B) after all amounts have been Incurred under clause (1)(A), (i) the Parent or the Restricted Subsidiaries can Incur additional Secured Indebtedness under this clause (1)(B)(i) if, after giving pro forma effect to such Incurrence, the Consolidated Secured Debt Ratio would be no greater than 3.5 to 1.0 and (ii) the Parent or the Restricted Subsidiaries can Incur additional First Lien Secured Obligations under this clause (1)(B)(ii) if, after giving pro forma effect to such Incurrence, the Consolidated First Lien Secured Debt Ratio would be no greater than 3.0 to 1.0 (and, for the avoidance of doubt, this clause (ii) shall only be available for the Incurrence of First Lien Secured Obligations);
(a2) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to and held by the Parent or a Restricted Subsidiary Subsidiary; provided, however, that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests any Capital Stock that results in any such Indebtedness being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof and (ii) any sale or other subsequent transfer of any such Indebtedness (other than to a Person that is not either the Issuer Parent or a Restricted Subsidiary thereof, Subsidiary) shall be deemed, in each case, to constitute an incurrence the Incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, obligor thereon that was not permitted by this clause (2);
(3) the New Unsecured Notes issued on the Issue Date (including any guarantees thereof);
(4) Indebtedness that is outstanding on the Issue Date (other than Indebtedness described in clause (1), (2) or (3) of this Section 4.09(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Parent (other than Indebtedness Incurred in connection with, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired by the Parent); provided, however, that on the date of such acquisition and after giving effect thereto on a pro forma basis, either (i) the Parent would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) or (ii) the Fixed Charge Coverage Ratio (A) would be at least 1.75 to 1.0 and (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition;
(6) Permitted Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to Section 4.09(a) or Sections 4.09(b)(3), (4) (except with respect to any Indebtedness for which New Unsecured Notes are exchanged therefor pursuant to the Transactions), (5), (22) or this clause (6);
(7) the incurrence Swap Obligations directly related to Indebtedness permitted to be Incurred by the Issuer or any of its Parent and the Restricted Subsidiaries of Hedging Obligations that are incurred pursuant to this Indenture or entered into in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee obligations in respect of (i) worker’s compensation and self-insurance and performance, bid, stay, customs, appeal, replevin and surety bonds and performance and completion guarantees and letters of credit supporting such obligations provided by the Issuer Parent or any Restricted Subsidiary and (ii) trade letters of Indebtedness credit and deferred compensation, severance, pension and health and welfare retirement benefits or the equivalent to current or former officers, directors and employees of the Issuer Parent or a Restricted Subsidiary any of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16its Subsidiaries;
(9) Indebtedness arising from the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 honoring by a Restricted Subsidiary bank or other financial institution of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer a check, draft, credit card, purchase card or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued similar instrument drawn against insufficient funds and similar liabilities in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims business or self-insurance, consistent with industry practice or other Indebtedness treasury, depositary and cash management services in the ordinary course of business or consistent with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiaryindustry practice; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person Indebtedness (other than credit or purchase cards) is extinguished within ten business days of notification to the Issuer or a Restricted Subsidiary thereof Issuers of their incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its Incurrence;
(10) Indebtedness consisting of any sale Guarantee by (i) the Issuers or a Guarantor of Indebtedness or other transfer Obligations of the Parent or any such shares of Disqualified Stock or preferred stock to the Restricted Subsidiaries, (ii) a Person that is not either the Issuer or a Foreign Restricted Subsidiary thereof shall of Indebtedness or other Obligations of another Foreign Restricted Subsidiary or (iii) a Non-Guarantor Subsidiary (other than the Issuers) of Indebtedness or other Obligations of another Non-Guarantor Subsidiary (other than the Issuers), in each case so long as the Incurrence of such guaranteed Indebtedness or other obligations by the Parent or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, that, if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must be deemedsubordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (11), does not exceed the greater of $200.0 million or 1.0% of Total Assets;
(12) Indebtedness of Non-Guarantor Subsidiaries (other than the Issuers) and Foreign Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (12), does not exceed the greater of $500.0 million;
(13) Indebtedness Incurred in respect of Purchase Money Indebtedness and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (13), does not exceed the greater of $450.0 million or 3.0% of Total Assets;
(14) Indebtedness of the Parent or any of the Restricted Subsidiaries consisting of (i) the financing of insurance premiums with the providers of such insurance or their affiliates, (ii) take-or-pay obligations contained in supply agreements or (iii) customer deposits and advance payments received from customers for goods and services purchased, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) Indebtedness of the incurrence by the Issuer Parent or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;
(16) Indebtedness in an aggregate amount not to exceed the foreign currency equivalent of the greater of $400.0 million or 2.5% of Total Assets in respect of letters of credit denominated in currencies other than U.S. dollars;
(17) Foreign Jurisdiction Deposits;
(18) Indebtedness consisting of guarantees of indebtedness or other obligations of joint ventures permitted under clause (19)(a) of the definition of “Permitted Investments;”
(19) Indebtedness Incurred in connection with judgments, decrees, attachments or awards that do not constitute an Event of Default under Section 6.01(6);
(20) Indebtedness in the form of (i) guarantees of loans and advances to officers, directors, agents, consultants and employees, in an aggregate amount not to exceed $20.0 million at any one time outstanding, and (ii) reimbursements owed to officers, directors, agents, consultants and employees of the Parent or any of its Subsidiaries;
(21) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees of the Parent or any of its Subsidiaries, their respective estates, spouses or former spouses with respect to the cancellation, purchase or redemption of Equity Interests of the Parent or any of its Subsidiaries, to the extent permitted under Section 4.07(b)(5);
(22) Indebtedness of the Issuers or a Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Issuers or such Guarantor of property used or useful in a Permitted Business (including a Product) (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Person owning such assets); provided, however, on the date of such Incurrence and after giving effect thereto on a pro forma basis, either (i) the Consolidated Total Debt Ratio would not be greater than 6.5 to 1.0 or (ii) the Fixed Charge Coverage Ratio (A) would permit to incur at least $1.00 of additional Indebtedness or (B) would be equal to or greater than such Fixed Charge Coverage Ratio immediately prior to such Incurrence;
(23) Non-Recourse Debt; provided, however, that the aggregate principal amount of any such Indebtedness, when taken together with all other Indebtedness Incurred pursuant to this clause (23) and then outstanding, does not exceed the greater of $400.0 million or 2.5% of Total Assets;
(24) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction;
(25) Indebtedness of the Parent or of any of the Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when taken together with all other Indebtedness of the Parent and the Restricted Subsidiaries then outstanding and Incurred pursuant to this clause (25), does not exceed the greater of $750.0 million or 5.0% of Total Assets, in each case, plus 100% of the net proceeds received by the Parent from the issuance or sale of Equity Interests (other than Disqualified Stock), and any Permitted Refinancing Indebtedness in respect of such Indebtedness Incurred pursuant to this clause (25); and
(2226) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. Indebtedness Incurred pursuant to a Permitted Receivables Facility.
(c) For purposes of determining compliance with this Section 4.10, 4.09:
(1) all Indebtedness outstanding under the Credit Agreement on the Original 2027 Secured Notes Issue Date will be treated as Incurred under clause (1) of Section 4.09(b);
(2) in the event that an item of Indebtedness (or any proposed Indebtedness portion thereof) meets the criteria of more than one of the categories types of Permitted Debt Indebtedness described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(b), the Issuer Issuers, in their sole discretion, will be permitted to classify such item of Indebtedness (or any portion thereof) at the time of Incurrence and will only be required to include the amount and type of such Indebtedness in one of the clauses of Section 4.09(b) (provided, that any Indebtedness originally classified as Incurred pursuant to any of clauses (2) through (26) of Section 4.09(b) may later be reclassified as having been Incurred pursuant to Section 4.09(a) or any other of clauses (2) through (26) of Section 4.09(b) to the extent that such reclassified Indebtedness could be Incurred pursuant to Section 4.09(a) or one of clauses (2) through (26) of Section 4.09(b), as the case may be, if it were Incurred at the time of such reclassification);
(3) the Issuers will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in this Section 4.09;
(4) with respect to Indebtedness permitted under Section 4.09(b)(4) in respect of Sale Leaseback Transactions that were not Capital Lease Obligations on the date Original 2027 Secured Notes Issue Date, any reclassification of its incurrence, and from time to time may reclassify, in such Sale Leaseback Transactions as Capital Lease Obligations shall not be deemed an Incurrence of Indebtedness for purposes of Section 4.09;
(5) the principal amount of Indebtedness outstanding under any manner that complies with clause of this Section 4.10 4.09 shall be determined after giving effect to the application of proceeds of any such Indebtedness to refinance any such other Indebtedness;
(6) if Indebtedness originally Incurred in reliance upon the Consolidated Secured Debt Ratio or the Consolidated First Lien Secured Debt Ratio under Section 4.09(b)(1) is being Refinanced under Section 4.09(b)(1) and such Refinancing would cause the maximum amount of Indebtedness thereunder to be exceeded at such time. , then such Refinancing will nevertheless be permitted thereunder and such Indebtedness under the Credit Agreement on date of this Indenture shall will be deemed to have been incurred under Section 4.09(b)(1) so long as (x) the Liens securing such Refinancing Indebtedness have a lien priority equal (or junior in the case of Indebtedness Incurred under the Consolidated Secured Debt Ratio) to the Liens securing the Indebtedness being Refinanced and (y) the principal amount of such Refinancing Indebtedness does not exceed the principal amount of Indebtedness being Refinanced plus all accrued interest on the Indebtedness being Refinanced and the amount of all fees and expenses, including premiums and defeasance costs, incurred in connection with such date pursuant to Section 4.10(b)(1). Any Refinancing; and
(7) for the avoidance of doubt, all Indebtedness incurred under Credit Facilities represented by the Notes and the Additional 2027 Secured Notes issued in connection with the Transactions will be Incurred (x) in an aggregate principal amount of $1.2 billion pursuant to clause (1) of the immediately preceding paragraph, consisting of $684.521 million aggregate principal amount of Notes and $515.479 million aggregate principal amount of Additional 2027 Secured Notes, (y) in an aggregate principal amount of $250.0 million of Notes pursuant to the first paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant and clause (40) of the definition of Permitted Liens and (z) in an aggregate principal amount of $6.069 million of Notes, pursuant to have been incurred the first paragraph of this covenant and clause (2)(iii) of the definition of Permitted Liens.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first incurred until committed, in the case of revolving credit debt; provided, that, if such Indebtedness is actually repaidincurred to Refinance other Indebtedness denominated in a foreign currency, notwithstanding any provisions under any Credit Facility that provide that 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 Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced.
(e) 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 deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).denominated that is in effect on the date of such R
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Sources: Indenture (Endo International PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Borrower will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerBorrower’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a6.3(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Borrower’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1i) the incurrence by the Issuer or Borrower and any Subsidiary Guarantor of (A) Indebtedness pursuant to any Loan Document (including Indebtedness under Credit Facilities any Incremental Facility, Replacement Facility and Extended Term Loans) and any Incremental Equivalent Debt incurred in accordance with Section 2.23, and (and the incurrence by the Guarantors of Guarantees thereofB) in an aggregate principal amount at without duplication, all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any one time outstanding (with letters of credit being deemed to have a principal amount equal Indebtedness incurred pursuant to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both foregoing clause (x) and clause (yA), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2ii) the incurrence by the Issuer or Borrower and its Restricted Subsidiaries of any Guarantors of the Existing IndebtednessDebt;
(3iii) the incurrence by the Issuer Borrower and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Senior Notes issued prior to the date of this Agreement, and any related Registered Equivalent Notes to be issued on in exchange therefor, and, in each case, the date of this Indenture and related Note GuaranteesGuarantees thereof;
(4iv) the incurrence by the Issuer Borrower 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 million or 2.5 billion and (y) 35.0% of Consolidated Tangible Assets the Borrower’s Total Assets, at the time of the Issuerany such incurrence pursuant to this clause (iv);
(5v) the incurrence by the Issuer Borrower 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture Agreement to be incurred under Section 4.10(a6.3(a) hereof or clauses (2ii), (3iii), (4iv), (5v), (15xiii), (xiv), (xv), (xxiv) or (16xxv) of this Section 4.10(b6.3(b);
(6vi) the incurrence by the Issuer Borrower or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Issuer Borrower and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Borrower or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Borrower 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 NotesTerm Loans, in the case of the IssuerBorrower, or the Note GuaranteeGuarantee of the Term Loans, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Issuer Borrower or a Restricted Subsidiary thereof of the Borrower, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Issuer Borrower or a Restricted Subsidiary thereofof the Borrower, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Borrower’s Restricted Subsidiaries to the Borrower 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 Parent, the Borrower or a Restricted Subsidiary of the Borrower or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, the Borrower or a Restricted Subsidiary of the Borrower, or a Guarantor, 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 (vii);
(viii) the incurrence by the Issuer Borrower or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not other than for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) ix) the Guarantee guarantee by the Issuer Borrower or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Borrower or a Restricted Subsidiary of the Issuer Borrower that was permitted to be incurred by another provision of this Section 4.106.3; provided, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Term Loans, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(x) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
(xi) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Borrower or any of its Restricted Subsidiaries, (B) in respect of netting, overdraft protection and other arrangements arising under standard business terms of any bank at which the Borrower or any Restricted Subsidiary maintains an overdraft, cash pooling or other similar facility or arrangement or (C) in respect of the financing of insurance premiums in the ordinary course of business, provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (B) and (C) of this paragraph shall not, at any time outstanding exceed $250.0 million;
(xii) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued in connection with any Permitted Joint Venture Investment;
(xiii) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Borrower’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xiii), at any time outstanding not to exceed the greater of (x) $400.0 million and (y) 1.0% of the Borrower’s Total Assets, at the time of such incurrence;
(xiv) the incurrence by the Borrower or any of its Restricted Subsidiaries of Contribution Indebtedness;
(xv) the incurrence by the Borrower or any of its Restricted Subsidiaries of (A) Indebtedness (including Acquired Debt) used to finance an acquisition of or a merger with another Person, provided that, the Borrower or the Person formed by or surviving any such consolidation or merger (if other than the Borrower or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 6.3(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Borrower immediately prior to such transaction, or (B) Indebtedness secured by Liens permitted by clauses (c) and (d) of the definition of Permitted Liens;
(xvi) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Borrower or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of a Guarantee any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Borrower or any Restricted Subsidiary that is not a Guarantor, thereof in connection with such Restricted Subsidiary complies with Section 4.16disposition;
(9xvii) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided, that, upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(xviii) [Reserved];
(xix) the incurrence by the Borrower or any of the Subsidiary Guarantors 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 (xix), not to exceed the greater of (x) $1.0 billion and (y) 2.0% of the Borrower’s Total Assets as of the time of incurrence;
(xx) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(xxi) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Obligations issued to current or former employees or directors of Parent, the Borrower or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an amount equal to the amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (v) of Section 6.1(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(xxii) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(xxiii) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Borrower or any Restricted Subsidiary of such Indebtedness;
(xxiv) Indebtedness incurred in connection with the Towers Transaction; and
(xxv) the incurrence by Restricted Subsidiaries that are not Guarantors of Indebtedness; provided, however, that the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (xxv), when aggregated with the principal amount (or accreted value) of all other Indebtedness then outstanding and incurred pursuant to this clause (xxv), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxv), does not exceed the greater of (x) $250.0 million and (y) 5.0% of the Consolidated Cash Flow of the Borrower and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available. The Borrower will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by clause (vi) above) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Term Loans and the applicable Guarantees of the Term Loans on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any Subsidiary Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of such Indebtedness being secured on a first or junior Lien basis. For purposes of (x) determining compliance with this Section 6.3, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxv) above, or is entitled to be incurred pursuant to Section 6.3(a) hereof, the Borrower will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 6.3 and (y) determining the amount of Indebtedness that may be incurred pursuant to clause (i)(A)(y) of Section 6.3(b), the Borrower may elect, pursuant to an Officers’ Certificate delivered to the Administrative Agent, to treat all or any portion of the commitment under any Indebtedness (and any refinancing with respect thereto) as being incurred at such time, in which case any subsequent incurrence of Indebtedness under such commitment or refinancing, as the case may be, shall not be deemed, for purposes of this calculation, to be an incurrence at such subsequent time. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles or the application thereof, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided6.3. Notwithstanding any other provision of this Section 6.3, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Borrower or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 6.3 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); and
(b) fluctuations in exchange rates or currency values, and in no event shall the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer reclassification of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale lease or other transfer of any such shares of Disqualified Stock or preferred stock liability as indebtedness due to a Person that is not either change in accounting principles after the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall Closing Date be deemed to have been incurred on such date pursuant to Section 4.10(b)(1)be an incurrence of Indebtedness. Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).In det
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Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), the Company and the Issuer Restricted Subsidiaries will not issue any Disqualified Stock Stock, and the Issuer Restricted Subsidiaries will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) ), or issue Disqualified Stock and the Restricted Subsidiaries may issue or preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or preferred stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided, howeverprovided further, that non-Guarantors may not incur Indebtedness under this Section 4.09(a) if, after giving pro forma effect to such Incurrence (including a pro forma application of the net proceeds therefrom), more than an aggregate amount of $30 million of Indebtedness or Disqualified Stock that may of non-Guarantors would be incurred under outstanding pursuant to this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 millionSection 4.09(a) at such time.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness (a) Indebtedness, letters of credit and bankers’ acceptances under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in up to an aggregate principal amount at outstanding as of any one time date of incurrence of any such Indebtedness, including the aggregate amount of any Permitted Refinancing Indebtedness incurred and outstanding pursuant to clause (with letters 1)(b) as of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) such date, not to exceed (i) the greater of (x) $385.0 125 million and (y) the amount of the Borrowing Base as of such date plus (ii) $415 million less (iii) the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount sum of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor principal payments with respect to repay any such Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 4.10(b)(1) and less, in (b) Permitted Refinancing Indebtedness incurred with respect to any Indebtedness incurred pursuant to the case of both foregoing clause (x) and clause (y1)(a), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be and Subsidiary Guarantees issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, Subsidiary (whether through the direct purchase of assets or the Capital Stock Equity Interests of any Person owning such assets), in an aggregate principal amountamount at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 35 million or (y) 3and 12.5% of Consolidated Net Tangible Assets (determined as of the Issuerdate of incurrence);
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses clause (2), (3), ) or (4)) above, this clause (5), clause (1516), (17), (23) or (1624) of this below or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness under Hedging Obligations that are incurred in the ordinary course of business not entered into for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderspeculation;
(8) the Guarantee issuance by any of the Issuer 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 and
(b) any sale or other transfer of Indebtedness of any such preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary of the Issuer 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 (8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued4.09;
(10) the incurrence 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 in the Issuer’s Unrestricted Subsidiaries ordinary course of Non-Recourse Debtbusiness; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt is extinguished within five Business Days of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10)incurrence;
(11) the incurrence by of Indebtedness of the Issuer Company or any of its Restricted Subsidiaries in respect of Indebtedness constituting reimbursement security for workers’ compensation claims, payment obligations in connection with respect self-insurance, health, disability or other employee benefits or property, casualty or liability insurance provided to letters the Company or any of credit issued its Restricted Subsidiaries, bankers’ acceptances, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business, including, without limitation, letters ; provided that the underlying obligation to perform is that of credit the Company or any of its Restricted Subsidiaries and not that of the Company’s Unrestricted Subsidiaries; and provided further that such underlying obligation is not in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceborrowed money;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from that may be deemed to arise as a result of agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, business or assets or Capital Stock of the Issuer Company 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 a Subsidiary for the purpose of financing such acquisition; provided that:
that (a) any amount of such Indebtedness is not reflected Obligations included on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will shall not be deemed to be reflected on that balance sheet for purposes of permitted under this clause (a)); and
12) and (b) the maximum assumable aggregate liability in respect of that Indebtedness all such Obligations outstanding under this clause (12) shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Company and the Restricted Subsidiary Subsidiaries in connection with that such disposition;
(13) Indebtedness incurred under commercial letters of credit issued for the issuance of Disqualified Stock or preferred stock by any account of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer Company or any of its Restricted Subsidiaries in the ordinary course of obligations business (and not for the purpose of, directly or indirectly, incurring Indebtedness or providing credit support or a similar arrangement in respect of performance Indebtedness); or Indebtedness of the Company or any of its Restricted Subsidiaries under letters of credit and surety bonds and completion Guarantees provided bank guarantees backstopped by letters of credit under the Issuer Credit Facilities;
(14) pledges, deposits or such Restricted Subsidiary payments made or given in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under health, safety or environmental obligations, or arising from guarantees to suppliers, lessors, licensees, contractors, franchisees or customers of obligations, other than Indebtedness, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Issuer Company or any Guarantor of its Restricted Subsidiaries issued to directors, officers or employees of the Company or any of its Restricted Subsidiaries in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the Notes, is not secured by any assets of the Company or any of its Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the Notes, in an aggregate principal amount at any time outstanding not to exceed $5 million;
(16) the incurrence by any Foreign Subsidiary of 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 as of the date of incurrence of any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed the greater of $50.0 million50 million and 20.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence);
(17) the incurrence of any Acquired Debt (which for purposes of this provision shall include preferred stock) or other Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; providedwith, thator in contemplation of, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition (including by way of merger or (yconsolidation) Persons that are acquired by the Issuer Company or any of its Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this IndentureSubsidiaries; provided, provided that after giving pro forma effect to any such transactionacquisition, either (a) the Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the incurrence and/or repayment net proceeds therefrom) would be at least 2.00 to 1.00 or retirement of any Indebtedness, (b) the Company’s pro forma Fixed Charge Coverage Ratio would be equal to or greater than the actual Fixed Charge Coverage Ratio of the Company immediately prior to such transactionacquisition and incurrence;
(18) Indebtedness incurred by the Company or any Restricted Subsidiary of the Company to the extent that the net proceeds thereof are promptly deposited to defease, redeem or to satisfy and discharge the Notes;
(19) contingent liabilities arising out Indebtedness of endorsements the Company or any Restricted Subsidiary of checks and other negotiable instruments for deposit the Company consisting of obligations to pay insurance premiums or collection take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(20) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the incurrence by the Issuer ordinary course of business;
(21) Indebtedness representing deferred compensation to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests employees of the Issuer or any ParentCompany and its Restricted Subsidiaries incurred in the ordinary course of business;
(22) cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case held by in connection with deposit accounts;
(23) Attributable Indebtedness in an aggregate principal amount at any former or current employeestime outstanding, officers, directors or consultants as of the Issuer date of incurrence of any Indebtedness pursuant to this clause (23), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (23), not to exceed the greater of its Restricted $75 million and 30.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence);
(24) additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, as of the date of incurrence of any Indebtedness pursuant to this clause (24), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (24), not to exceed the greater of $50 million and 20.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence); and
(25) Indebtedness of Foreign Subsidiaries or their respective estatesin connection with securitizations of accounts receivable and all collateral securing such accounts receivable, spouses, former spouses or family members under any management equity plan or stock option all contracts and contract rights and all guarantees or other management or employee benefit plan upon the death, disability or termination of employment obligations in respect of such Persons accounts receivable, all proceeds of such accounts receivable and other assets which are the type customarily transferred in connection with securitizations of accounts receivable in an aggregate amount at any one time outstanding not exceeding the greater of $50 million and 20.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence). The Company will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is contractually subordinated in right of payment to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of any other Indebtedness of the Issuer Company or of such Guarantor, as the case may be, unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Subsidiary Guarantee on substantially the same terms. For purposes of the foregoing, no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Restricted Subsidiary supported Guarantor solely by virtue of being unsecured or secured by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess junior priority Lien or by virtue of the stated amount fact that the holders of such letter Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of credit; and
(22) contingent liabilities arising out of endorsements of checks and such holders priority over the other negotiable instruments for deposit or collection holders in the ordinary course collateral held by them, including intercreditor agreements that contain customary provisions requiring turnover by holders of businessjunior priority Liens of proceeds of collateral in the event that the security interests in favor of the holders of the senior priority in such intended collateral are not perfected or invalidated and similar customary provisions protecting the holders of senior priority Liens. For purposes of determining compliance with this Section 4.104.09, (i) any Indebtedness outstanding under the ABL Credit Agreement or the Term Loan Credit Agreement (in each case, as in effect on the Issue Date) will be treated as incurred under clause (1) above and (ii) in the event that any an item of proposed Indebtedness (other than Indebtedness described in clause (1) above, which the Company shall not be permitted to reclassify) meets the criteria of more than one of the categories of Permitted Debt described in clauses (12) through (2225) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this Section 4.10 at such time4.09. In addition, the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness under in the Credit Agreement form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on date Disqualified Stock in the form of this Indenture shall additional shares of the same class of Disqualified Stock will not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any treated as an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) or an issuance of paragraph (b) of this Section 4.10 shall be deemed Disqualified Stock for purposes of this covenant Section 4.09. Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is this Section 4.09 shall not be deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).exceeded with respect to any outstanding Indebtedness due solely to the result of fluctu
Appears in 1 contract
Sources: Indenture (Diamond Foods Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit Neither the Company nor any of its Restricted Subsidiaries toGuarantor will, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and none of the Issuer Guarantors will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Leverage Ratio and the Secured Leverage Ratio for the IssuerCompany’s most 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 issued, as the case may be, would have been at least 2.00 no greater than 3.0 to 11.0 in respect of the Leverage Ratio and 1.5 to 1.0 in respect of the Secured Leverage Ratio, 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of the Guarantors of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors thereunder) not to exceed the greater of (x) $385.0 100.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of the Guarantors since the date of this Indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10 hereof;
(2) the incurrence by the Issuer or any Company and the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), ) and (5), (15) or (1610) of this Section 4.10(b4.09(b);
(65) the incurrence by the Issuer Company or any of its Restricted Subsidiaries the Guarantors of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiariesthe Guarantors; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and Guarantor and
(iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofGuarantor, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (5);
(6) the issuance by any of the Guarantors to the Company or to any of the Guarantors 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 Guarantor; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Guarantor, will be deemed, in each case, to constitute an issuance of such preferred stock by such Guarantor that was not permitted by this clause (6);
(7) the incurrence guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Guarantor that was permitted to be incurred by another provision of this Section 4.1050 4.09; provided thatprovided, however, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(8) the incurrence by the Company or any of the Guarantors of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds, appeal or other similar bonds in the ordinary course of business, and in any such case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16reimbursement obligations in connection therewith;
(9) the incurrence by the Company or any of the Guarantors 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;
(10) the incurrence by the Company or any of the Guarantors of Indebtedness represented by Capital Lease Obligations, purchase money obligations or other obligations, in each case incurred for the purpose of financing all or any part of the purchase price, cost or value of any equipment used in the business of the Company or any of the Guarantors, 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 (10), not to exceed $25.0 million at any time outstanding;
(11) the incurrence by the Company or any of the Guarantors of Hedging Obligations;
(12) Indebtedness of the Company or any of the Guarantors to the extent the net proceeds thereof are promptly deposited to defease or satisfy and discharge all outstanding Notes in full as provided in Articles 8 and 12 hereof;
(13) obligations of the Company and any of the Guarantors arising from agreements of the Company or a Guarantor 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 a Subsidiary of the Company in accordance with the terms of this Indenture, other than Guarantees by the Company or any Guarantor of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary of the Company for the purpose of financing such acquisition; provided, however, that the maximum aggregate liability in respect of all such obligations shall not exceed the gross proceeds, including the Fair Market Value as determined in good faith by the Board of Directors of the Company of non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value), actually received by the Company and the Guarantors in connection with such disposition; or
(14) obligations (other than Parity Lien Obligations) of the Company and any of the Guarantors arising from the entering into, maintaining or disposing of, Core Investments, including purchasing of any Core Investment on margin, any capital call obligations, make-well arrangements, hedging obligations of any nature or any obligations regarding a short position in any of such Core Investments. The Company will not incur, and will not permit any 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 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 Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, 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 initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. Indebtedness permitted by this covenant need not be permitted 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 4.09 permitting such Indebtedness. The outstanding principal amount of any particular Indebtedness shall be counted only once such that (without limitation) any obligation arising under any guarantee, Lien, letter of credit or similar instrument supporting such Indebtedness shall be disregarded. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided4.09. Notwithstanding any other provision of this Section 4.09, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect Guarantor may incur pursuant 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values.
(a))c) 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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance date of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (Vector Group LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, provided that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may issue preferred stockincur Indebtedness (including Acquired Debt), if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 3.00 to 11.00, 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 the Disqualified Stock or the preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of the Company of additional Indebtedness and letters of credit under the Senior Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Facility in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed the excess of (a) the greater of (x) $385.0 100.0 million and (y) the an amount equal to 35% of the Borrowing Base as of the date of such incurrence, less, in incurrence over (b) the case sum of both clause (x) and clause (y), the aggregate amount of all repayments, optional or mandatory, of the principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date (I) as a result of the application of any Net Proceeds of Asset Sales, applied by the Issuer Sales pursuant to Section 4.10(b)(1)(a) hereof or any Guarantor to repay any Indebtedness under Credit Facilities (and, II) that was included in clause (E) in the case calculation of Excess Cash Flow in any fiscal year and (y) the aggregate amount of all commitment reductions with respect to any revolving credit Indebtedness under extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date (I) as a Credit Facility, to effect a corresponding commitment reduction thereunder) result of the application of any Net Proceeds of Asset Sales pursuant to Section 4.13 and less, 4.10(b)(1)(a) hereof or (II) that was included in clause (E) in the case calculation of both clause (x) and clause (y), amounts outstanding under Excess Cash Flow in any Qualified Receivables Transactionsfiscal year;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture Issue Date and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred within 360 days of the acquisition or completion of construction or installation for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsAttributable Debt relating to a sale leaseback transaction, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $7.5 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (14), (15), (17) or and (1619) of this Section 4.10(bparagraph (b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health disability or other employee benefits or property, casualty or liability insurance or self-insurance obligations, reimbursement obligations with respect to commercial letters of credit, bankers’ acceptances and performance and surety bonds in the ordinary course of business;
(11) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary in accordance with the terms of this Indenture, other than Indebtedness or guarantees of Indebtedness incurred or assumed by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(13) endorsements of instruments or other items of deposit;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness owed to any current or former officer, director or employee of the Company or any of its Restricted Subsidiaries in connection with the repurchase, redemption or other acquisition or retirement of Equity Interests held by any such current or former officer, director or employee of the Company or any of its Restricted Subsidiaries; provided that such repurchase, redemption or other acquisition or retirement is permitted by Section 4.07(b)(5) hereof;
(15) Indebtedness of a Restricted Subsidiary incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of or was otherwise acquired by or merged into the Company or such Restricted Subsidiary); provided that after giving effect to such transaction, (a) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof and (b) such Restricted Subsidiary is (i) a Domestic Restricted Subsidiary and becomes a Guarantor or (ii) is a Foreign Restricted Subsidiary and the aggregate principal amount of Indebtedness at any time outstanding under this clause (15)(b)(ii), together with the aggregate principal amount of Indebtedness outstanding under clause (16) below, not to exceed $12.5 million;
(16) the incurrence by Foreign Restricted Subsidiaries of the Company of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (16), together with the aggregate principal amount outstanding pursuant to clause (15)(b)(ii) above, not to exceed the excess of (a) $15.0 million over (b) the sum of (x) the aggregate amount of all optional repayments of the principal of any term Indebtedness thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date and (y) the aggregate amount of all commitment reductions with respect to any revolving credit extensions thereunder that have been made by the Company or any of its Restricted Subsidiaries since the Issue Date, in each case, that was included in clause (E) in the calculation of Excess Cash Flow in any fiscal year;
(17) the incurrence by the Company of Convertible Indebtedness in an aggregate principal amount under this clause (17) not to exceed $60.0 million;
(18) Indebtedness of the Company or any Guarantor in an aggregate principal amount not to exceed $25.0 million, the proceeds of which are used to directly or indirectly acquire Capital Stock of ▇▇▇▇▇▇ Steel Company, LLC, provided that after giving effect to the incurrence of such Indebtedness and the application of the proceeds therefrom on such date, the ratio of (1) total Indebtedness of the Company and its Restricted Subsidiaries as of the date of incurrence (determined on a consolidated basis in accordance with GAAP) to (2) Consolidated Cash Flow of the Company for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would not exceed 3.00 to 1.00. Such ratio shall be calculated in a manner consistent with the definition of “Fixed Charge Coverage Ratio,” including any pro forma adjustments to Consolidated Cash Flow as set forth therein; and
(19) 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 renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (19), not to exceed $10.0 million.
(c) The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also 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 subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a junior priority basis with respect to the same Collateral.
(d) For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (19) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
this covenant. Indebtedness under the Senior Credit Facility outstanding on the Issue Date will be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interestinterest or premium, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values.
(a))e) 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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds assets of the specified Person, the lesser of:
(A) the fair market value Fair Market Value of those non-cash proceeds being measured such assets at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance date of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (Castle a M & Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and any of the Company's Restricted Subsidiaries may issue preferred stock, incur Indebtedness if the Company's Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 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, however, that . The provisions of the aggregate amount first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer Company or any Guarantor its Restricted Subsidiaries of term Indebtedness under the Credit Facilities (and the incurrence by the Guarantors Facility, letters of Guarantees thereof) in an aggregate principal amount at any one time outstanding credit (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed and related Guarantees under the greater of (x) $385.0 million and (y) Credit Facility; provided that the aggregate principal amount of the Borrowing Base as all term Indebtedness and letters of credit of the date Company and its Restricted Subsidiaries (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) outstanding under the Credit Facility after giving effect to such incurrence, lessincluding all Permitted Refinancing Indebtedness incurred to refund, in the case of both refinance or replace any other Indebtedness incurred pursuant to this clause (xi) and clause (y), the aggregate does not exceed an amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor equal to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions$550.0 million;
(2ii) the incurrence by the Issuer Company or its Restricted Subsidiaries of revolving credit Indebtedness under the Credit Facility, letters of credit (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) and related Guarantees under the Credit Facility; provided that the aggregate principal amount of all revolving Indebtedness and letters of credit of the Company and its Restricted Subsidiaries (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) outstanding under the Credit Facility after giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Guarantors other Indebtedness incurred pursuant to this clause (ii), does not exceed $700.0 million less the aggregate amount of Asset Sale proceeds applied by the Company and its Restricted Subsidiaries to permanently reduce the availability of revolving credit Indebtedness under the Credit Agreements pursuant to the provisions of Section 4.10 hereof;
(iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes Senior Notes, the Senior Subordinated Notes, the Senior Subsidiary Guarantees and the Subordinated Subsidiary Guarantees limited in aggregate principal amount, without duplication, to be issued on the date of amounts outstanding under this Senior Note Indenture and related the Senior Subordinated Note GuaranteesIndenture as of their respective dates;
(4v) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4v), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3exceed 5% of Consolidated Tangible Assets of the IssuerTotal Assets;
(5vi) the incurrence by the Issuer 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 is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
that (ai) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 NotesSenior Note and this Senior Note Indenture, in the case (ii) if a Restricted Subsidiary of the IssuerCompany is the obligor on such Indebtedness, or such Indebtedness is expressly subordinated to the Note Guarantee, prior payment in the case full in cash of a Guarantor; and
such Restricted Subsidiary's Senior Subsidiary Guarantee and (b) (iiii)(A) any subsequent event or issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, of the Company shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vii);
(7viii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary normal course of business for the purpose of fixing, fixing or hedging or swapping interest ratecurrency, commodity price or foreign currency exchange interest rate risk (or including with respect to reverse or amend any such agreements previously made for such purposes), Indebtedness that is permitted by the terms of this Senior Note Indenture to be outstanding in connection with the conduct of their respective businesses and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10ix) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of businessbusiness solely in respect of performance, includingsurety and similar bonds, without limitation, completion or performance guarantees or standby letters of credit in respect issued for the purpose of supporting workers’ ' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon liabilities of 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries Subsidiaries, to the extent that such incurrence does not result in the incurrence of any obligation for the payment of borrowed money to others;
(x) the incurrence of Indebtedness arising from agreements of the Issuer Company or such 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 business, assets or Capital Stock a Subsidiary;
(xi) the incurrence by a Restricted Subsidiary of the Issuer Company of Indebtedness in connection with and in contemplation of, the concurrent disposition of such Restricted Subsidiary to the stockholders of the Company; provided that such disposition occurs concurrently with such incurrence and following such disposition, neither the Company nor any of its Restricted Subsidiaries has any liability with respect to such Indebtedness;
(xii) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is Non-Recourse Debt with respect to the Company and its other Restricted Subsidiaries (except for Standard Securitization Undertakings and Limited Originator Recourse);
(xiii) the guarantee by the Company or any of the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary, other than Guarantees Subsidiary of Indebtedness the Company that was permitted to be incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes another provision of this clause (a))Section 4.09; and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14xiv) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any other Indebtedness incurred pursuant to this clause (15xiv), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (22xiv) above, above as of the date of incurrence thereof or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09 as of the date of incurrence thereof, the Issuer will be permitted to Company shall, in its sole discretion, classify or reclassify such item of Indebtedness on as of the date of its incurrence, and from time to time may reclassify, incurrence thereof in any manner that complies with this Section 4.10 at 4.09 and such time. item of Indebtedness under shall be treated as having been incurred pursuant to only one of such clauses or pursuant to the Credit Agreement on date first paragraph of this Indenture shall Section 4.09. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any be an incurrence of Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Section 4.09.
Appears in 1 contract
Sources: Senior Note Indenture (Ball Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock if, immediately after giving effect to the incurrence of such additional Indebtedness or issuance of Disqualified Stock or preferred stock and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Indebtedness and Disqualified Stock of the Company and its Restricted Subsidiaries and preferred stock of Restricted Subsidiaries on a consolidated basis is greater than 60% of Adjusted Total Assets.
(b) The Company will not, and will not permit any of its Restricted Subsidiaries to incur any Secured Indebtedness or Subsidiary Indebtedness (including Acquired Debt) if, immediately after giving effect to the Incurrence of such additional Secured Indebtedness or Subsidiary Indebtedness and the receipt and application of the proceeds therefrom, the aggregate principal amount of all outstanding Secured Indebtedness and Subsidiary Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis is greater than 40% of Adjusted Total Assets.
(c) The Company will not, and will not permit any of its Restricted Subsidiaries to incur any Indebtedness (including Acquired Debt), and the 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 Issuer Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stock, if the Fixed Charge Consolidated Interest Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(bd) Section 4.10(aThe provisions of Sections 4.09(a), 4.09(b) and 4.09(c) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 135.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10 hereof;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(aSections 4.09(a), 4.09(b) and 4.09(c) hereof or clauses (2), (3), (4), (5), (15) or (1612) of this Section 4.10(b4.09(d);
(65) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock and the any Restricted Subsidiaries Subsidiary may issue preferred stock, stock (including Disqualified Stock) if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 2.0 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1a) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions750.0 million;
(2b) Existing Indebtedness;
(c) the incurrence by the Issuer or any Company and the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4d) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4d), not to exceed, exceed $25.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5e) the incurrence by the Issuer 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 is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.09 or clauses (2b), (3c), (4d), (5j), (15m), (n) or this clause (16e) of this Section 4.10(b)paragraph;
(6f) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging (a) interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or swapping interest rate, commodity price or foreign currency (b) exchange rate risk (with respect to obligations under any agreement or Indebtedness, or with respect to reverse any asset, of such Person that is payable or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time denominated in a currency other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderU.S. Dollars;
(8) h) the Guarantee guarantee by the Issuer Company or any of the Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9i) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock or preferred stock (including Disqualified Stock) in the form of additional shares of the same class of Disqualified Stock or preferred stock (including Disqualified Stock) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock (including Disqualified Stock) for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10j) The issuance of Convertible Subordinated Indebtedness and/or the incurrence by issuance of Convertible Preferred Stock in an aggregate principal amount (with the Issuer’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 liquidation value of the Issuer that was Convertible Preferred Stock being treated as its principal amount for this purpose) not permitted by to exceed $375.0 million at any one time outstanding pursuant to this clause (10j), plus the issuance of any related securities issued by a subsidiary trust or similar financing vehicle in connection therewith;
(11k) Indebtedness of the incurrence by the Issuer Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries guarantees, indemnities, hold backs or obligations in respect of Indebtedness constituting reimbursement obligations purchase price adjustments in connection with respect to letters the acquisition or disposition of credit issued in the ordinary course of businessassets, including, without limitation, shares of Capital Stock of Restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or disposition of assets which are contingent on the performance of the assets acquired or disposed of;
(l) Indebtedness represented by (i) letters of credit for the account of the Company or any Restricted Subsidiary or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the extent that such letters of credit and other obligations, as the case may be, are intended to provide security for workers' compensation claims, payment obligations in respect of workers’ compensation claims or connection with self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to participation in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale government reimbursement or other transfer of any such shares of Disqualified Stock programs or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary other similar requirements in the ordinary course of business;
(15m) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness to the extent the proceeds thereof are used to purchase Notes pursuant to a Change of Control Offer pursuant to Section 4.15; and
(n) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may include, but is not limited to, Indebtedness of the types referred to in the foregoing clauses (a) through (m)) 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16n), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1a) through (22n) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.09, the Issuer will Company shall be permitted to classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall will be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1a) of paragraph (b) the definition of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)Permitted Debt.
Appears in 1 contract
Sources: Indenture (Omnicare Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or ), and the Company may issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Leverage Ratio of the Company for the Issuer’s most recently ended four full fiscal quarters for which internal financial statements are available Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would not have been at least 2.00 greater than 7.0 to 1, 1 determined on a pro forma basis (including a after giving pro forma effect to such incurrence or issuance and to the application of the net proceeds therefrom), as if ) and in accordance with the additional Indebtedness had been incurred Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning definition of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 millionLeverage Ratio.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiary of Indebtedness under any Credit Facilities; provided that the aggregate principal amount of all Indebtedness of the Company and the Restricted Subsidiaries outstanding under any Credit Facilities (and the after giving effect to such incurrence by the Guarantors of Guarantees thereof) in does not exceed 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), 1.025 billion less the aggregate amount of all Net Proceeds of Asset Sales, Sales required to be applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Indenture to repay any Indebtedness under the Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10 hereof;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes issued in the Offering and the related Note Guarantees and the Exchange Notes and the related Note Guarantees to be issued on pursuant to the date of this Indenture and related Note GuaranteesRegistration Rights Agreement;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed, exceed $20.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 replace, Indebtedness of the Company or any of its Restricted Subsidiaries or Disqualified Stock of the Company (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (16) 8) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) : (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations; provided that the agreements governing such Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee guarantee (or co-issuance) by the Issuer Company or any of the Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed (or co-issued) is subordinated in right of payment to or pari passu in right of payment with the Notes, then the applicable Guarantee (or co-issuance) shall be subordinated in right of payment or pari passu in right of payment, as applicable, to the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;same extent as the Indebtedness guaranteed (or co-issued); and
(9) 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, not to exceed $50.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (9) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges the Cash Interest Expense of the Issuer as accrued;
(10) Company to the incurrence by extent paid in cash. Notwithstanding any other provision of this Section 4.09, the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); and
(b) the maximum assumable liability fluctuations in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock exchange rates or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)currency values.
Appears in 1 contract
Sources: Indenture (Emmis Operating Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries that is not a Guarantor to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal an amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed $2.25 billion, less the greater sum of (xi) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 4.10 and less, (ii) the amount of Indebtedness in the case excess of both $150.0 million incurred pursuant to clause (x10) and clause (yof this Section 4.09(b), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on (excluding any Additional Notes), the date Subsidiary Guarantees of this Indenture all Notes, the 2018 Notes and related Note Guaranteesthe Subsidiary Guarantees of all 2018 Notes;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal), plant or equipment assets used in the business of the Issuer Company or any such Restricted Subsidiary, or in respect of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsa Sale and Leaseback Transaction, in an aggregate principal amount, including and all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $50.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses clause (2), (3), (4), (5), (15) or (163) of above or this clause (5) or pursuant to Section 4.10(b4.09(a);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between owed to the Company or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to held by a Restricted Subsidiary that 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 IssuerCompany, or the Note GuaranteeSubsidiary Guarantee of such Guarantor, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the incurrence Company or any Restricted Subsidiary and not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this covenant and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;
(8) the guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, covenant and could have been incurred (in compliance with this covenant) by the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, Person so guaranteeing such Restricted Subsidiary complies with Section 4.16Indebtedness;
(9) the incurrence by any of the Company’s Foreign Subsidiaries of Indebtedness in an aggregate principal amount, including all Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed (x) $75.0 million at any time outstanding plus (y) $65.0 million at any time outstanding; provided that any Indebtedness under this subclause (y) shall be supported by a letter of credit incurred under one or more Credit Facilities pursuant to clause (1) of this Section 4.09(b);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness pursuant to a Receivables Financing;
(11) 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;
(12) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of security for workers’ compensation claims, payment obligations in connection with self-insurance, performance bonds, surety bonds or similar requirements in the ordinary course of business;
(13) indemnification, adjustment of purchase price, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Company 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 Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included on the face of the balance sheet of the Company or any Restricted Subsidiary shall not be permitted under this clause (13) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this clause (13) shall at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiaries in connection with such disposition; and
(14) 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 Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (14), not to exceed $100.0 million.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence (or later reclassify such Indebtedness in whole or in part) in any manner that complies with this covenant. In addition, the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 treated as an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10Indebtedness; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;. Notwithstanding the foregoing, any Indebtedness outstanding pursuant to the Credit Agreement on the date of this Indenture will be deemed to have been incurred pursuant to clause (1) of the definition of “Permitted Debt.”
(10d) Notwithstanding the foregoing, the maximum amount of Indebtedness that may be incurred pursuant to this covenant shall not be deemed to be exceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in the exchange rates of currencies.
(e) For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence by of Indebtedness where the Issuer’s Unrestricted Subsidiaries Indebtedness incurred is denominated in a different currency, the amount of Non-Recourse Debtsuch Indebtedness will be the U.S. Dollar Equivalent determined on the date of the incurrence of such Indebtedness; provided, however, that if any such Indebtedness ceases denominated in a different currency is subject to a Currency Protection Agreement with respect to U.S. dollars covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be as provided in such Currency Protection Agreement. The principal amount of any Permitted Refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. Dollar Equivalent of the Indebtedness refinanced, except to the extent that (1) such U.S. Dollar Equivalent was determined based on a Currency Protection Agreement, in which case the Permitted Refinancing Indebtedness will be determined in accordance with the preceding sentence, and (2) the principal amount of the Permitted Refinancing Indebtedness exceeds the principal amount of the Indebtedness being refinanced, in which case the U.S. Dollar Equivalent of such excess, as appropriate, will be determined on the date such Permitted Refinancing Debt is incurred.
(f) Notwithstanding the provisions of clauses (a) through (e) of this Section 4.09, the Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness that is or purports to be Non-Recourse Debt by its terms (or by the terms of an Unrestricted any agreement governing such Indebtedness) subordinated in right of payment to any other Indebtedness of the Company or of such Restricted Subsidiary, as the case may be, unless such event shall Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinated in the right of payment to the Notes or the Subsidiary Guarantee of such Restricted Subsidiary, to the same extent and in the same manner as such Indebtedness is subordinated in right of payment to such other Indebtedness of the Company or such Restricted Subsidiary, as the case may be. For purposes of this Section 4.09(f), no Indebtedness will be deemed to constitute an incurrence be subordinated in right of payment to any other Indebtedness by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in solely by virtue of being unsecured or secured by a footnote junior priority Lien or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any virtue of the Issuer’s Restricted Subsidiaries issued to fact that the Issuer holders of such Indebtedness have entered into intercreditor agreements or another Restricted Subsidiary; provided that (i) any subsequent issuance other arrangements giving one or transfer more of any Equity Securities that results such holders priority over the other holders in such Disqualified Stock or preferred stock being the collateral held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstandingthem, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (15), not to exceed $75.0 million;
(16) the incurrence intercreditor agreements that contain customary provisions requiring turnover by the Foreign Restricted Subsidiaries holders of the Issuer junior prior liens of Indebtedness in an aggregate principal amount at any one time outstanding (with letters proceeds of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, collateral in the event that any proposed Indebtedness meets the criteria of more than one security interests in favor of the categories holders of Permitted Debt described the senior priority in clauses (1) through (22) above, such intended collateral are not perfected or is entitled to be incurred pursuant to Section 4.10(a), invalidated and similar customary provisions protecting the Issuer will be permitted to classify such item holders of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)senior priority liens.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) of this Indenture will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of its Restricted Subsidiaries of Indebtedness under Credit Facilities (and and/or the incurrence by a Receivables Subsidiary of Indebtedness pursuant to a Qualified Receivables Transaction; provided that the Guarantors of Guarantees thereof) in an aggregate principal amount of all Indebtedness under Credit Facilities and pursuant to Qualified Receivables Transactions at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) shall not to exceed the greater of (xi) $385.0 225.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of the Indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction Facility (and permanently reduce the commitments thereunder) pursuant to Section 4.13 and less, in (ii) the case amount of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsthe Borrowing Base;
(2) the incurrence by the Issuer Company and any of its Restricted Subsidiaries of additional Indebtedness, in each case, incurred for the purpose of financing some or all of its acquisition of assets of another Person (whether through the direct acquisition of such assets or the acquisition of Capital Stock of any Guarantors Person owning such assets), provided that (i) such assets are used or useful in a Permitted Business and (ii) the Company’s Fixed Charge Coverage Ratio is greater after giving pro forma effect to such acquisition and any related financing transaction as if the same had occurred at the beginning of the Existing Indebtednessapplicable four-quarter period than the Company’s actual Fixed Charge Coverage Ratio for the period;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries of the Existing Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees(other than Indebtedness described in clause (1) above);
(4) the incurrence by the Issuer Company and any Guarantors of Indebtedness represented by the Notes and any Subsidiary Guarantees to be issued from time to time and the incurrence by the Company and any Guarantors of Indebtedness represented by the Old Notes and Subsidiary Guarantees issued from time to time under the Old Notes Indenture governing the Old Notes;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (including 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, price or cost of construction design, construction, installation or improvement, improvement or lease of property (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, (whether through the direct purchase acquisition of such assets or the acquisition of Capital Stock of any Person owning such assets) within 180 days thereafter used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (45), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 10.0 million or and (yii) 32.0% of Consolidated Tangible Assets of the IssuerTotal Assets;
(56) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) that is was permitted by this the Indenture to be incurred under clause (a) of this Section 4.10(a) 4.09 or clauses (2), (3), (4), (5), (15) or (1617) of this Section 4.10(b4.09(b);
(67) the incurrence by the Issuer Company or any of its Restricted Subsidiaries that are Guarantors of intercompany Indebtedness between or among the Issuer Company and any of its Restricted SubsidiariesSubsidiaries that are Guarantors;
(8) 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) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness preferred stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and of the Company; and
(iiB) any sale or other transfer of any such Indebtedness preferred stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, shall of the Company; will be deemed, in each case, to constitute an incurrence issuance of such Indebtedness preferred stock by the Issuer or such Restricted Subsidiary, as the case may be, Subsidiary that was not permitted by this clause (6)8);
(79) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for business;
(10) the purpose guarantee by (i) the Company or any of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend the Guarantors of any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at Company or a Guarantor and (ii) any time other than as Restricted Subsidiary of the Company that is not a result Guarantor of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason any Indebtedness of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer Company or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer Company, in each case that was permitted to be incurred by another provision of this Section 4.104.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(11) 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, in respect of workers’ compensation claims or self insurance, other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims and obligations in respect of performance and surety bonds provided by the Company or any Restricted Subsidiary of the Company in the ordinary course of business;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(13) the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
(14) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the acquisition or disposition of any business, assets or a Restricted Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that, with respect to any such disposition, the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the case of a Guarantee of any gross proceeds actually received by the Company and its Restricted Subsidiary that is not a Guarantor, Subsidiaries in connection with such Restricted Subsidiary complies with Section 4.16disposition;
(915) the incurrence of Indebtedness and/or the issuance of preferred stock by Foreign Subsidiaries; provided that the aggregate principal amount of Indebtedness incurred pursuant to this clause (15), including all Permitted Refinancing Indebtedness incurred to refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), and the aggregate liquidation value of all preferred stock issued pursuant to this clause (15), does not exceed $10.0 million at any one time outstanding;
(16) Indebtedness arising from transactions permitted pursuant to clause (10) of the second paragraph of the definition of Asset Sale; and
(17) 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, replace, defease or discharge any Indebtedness incurred pursuant to this clause (17), not to exceed $25.0 million. The Company will not incur, and will not permit any 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 applicable Subsidiary 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 Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. For purposes of this Section 4.09, any Permitted Debt and any Qualified Holdco Indebtedness incurred in reliance upon the Company’s ability to incur Permitted Debt will be treated as incurred by the Company for purposes of determining whether additional Permitted Debt can be incurred for so long as such Qualified Holdco Indebtedness remains outstanding. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) above, or is entitled to be incurred pursuant to clause (a) of this Section 4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under the Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of such Disqualified Stock is included in Fixed Charges of the Issuer Company as accrued;
. Notwithstanding any other provision of this covenant, (10i) the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); and
(b) the maximum assumable liability fluctuations in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock exchange rates or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof currency values, and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), that the Company or any Restricted Subsidiary may incur pursuant to the Last Out Term Loan Agreement shall not exceed the maximum Last Out Facility Cap Amount. The principal amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant under a Credit Facility in accordance with clause (1) above of this Section 4.09(b) shall not be deemed a separate incurrence of Indebtedness for purposes of this Section 4.09, but only to the Credit Agreement in a principal amount not in excess extent of the stated amount of such letter of credit. 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
(223) contingent liabilities arising out in respect of endorsements Indebtedness of checks and other negotiable instruments for deposit or collection in another Person secured by a Lien on the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one assets of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)specified Person, the Issuer will be permitted to classify lesser of:
(a) the Fair Market Value of such item of Indebtedness on asset at the date of its incurrencedetermination, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) the amount of this Section 4.10 shall be deemed for purposes the Indebtedness of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (Apparel Holding Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four full fiscal quarters (or other period specified in the definition of Fixed Charge Coverage Ratio) 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Issuers and the Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (xi) $385.0 million and 400.0 million, (yii) the amount 32.5% of the Borrowing Base as of Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence and (iii) the Borrowing Base at the time of incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 40.0 million or and (yii) 33.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (1514) or (1615) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Company or any of its Restricted Subsidiaries of NonIndebtedness in respect of self-Recourse Debt; providedinsurance obligations or bid, howeverplugging and abandonment, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiaryappeal, such event shall be deemed to constitute an incurrence of Indebtedness reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the Issuer that was not permitted by this clause (10)foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Issuer Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred Subsidiary in a transaction permitted by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisitionthis Indenture; provided that:
(a) that such Indebtedness obligation is not reflected as a liability on the face of the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;Permitted Acquisition Indebtedness; and
(15) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million;
40.0 million and (16ii) the incurrence by the Foreign Restricted Subsidiaries 3.75% of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability Company’s Adjusted Consolidated Net Tangible Assets determined as of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment date of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessissuance. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2215) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the Credit Agreement outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien 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 payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this covenant Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to have been incurred the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date such of determination; and
(2) the amount of the Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.08(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed exceed, at any time outstanding, the greater of (x) $385.0 US$50.0 million and (y) the amount 8.0% of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsConsolidated Tangible Assets;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIssue Date;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 US$50.0 million or and (y) 38.0% of Consolidated Tangible Assets of the IssuerAssets;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.08(a) hereof or clauses (2), (3), (4), ) (5), (15) or (1610) of this Section 4.10(b4.08(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall of the Company; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 any:
(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; or
(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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred or Treasury Management Arrangements in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.08; provided thatthat 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;
(10) Indebtedness of the Company or any of its Restricted Subsidiaries constituting Acquired Debt; provided that such Acquired Debt is not incurred in contemplation of the related acquisition or merger; provided, further, that after giving effect to such acquisition and the incurrence of Indebtedness, either (i) the Company would be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.08(a) or (ii) the Company would have had a Fixed Charge Coverage Ratio not less than the actual Fixed Charge Coverage Ratio for the Company pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.08(a);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of (A) workers’ compensation claims, health, disability or other employee benefits, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business, (B) performance bonds, bank guarantees or similar obligations for or in connection with pledges, deposits or payments made or given in relation to such performance bonds, bank guarantees or similar instruments in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under mining, health, safety, affected local community or aboriginal peoples’ benefits, reclamation, mine closure or other environmental obligations or in relation to infrastructure arrangements owned or provided to or applied for by the Company or any of its Restricted Subsidiaries, (C) letters of credit issued or incurred to support the purchase of supplies and equipment, including fuel, in the case ordinary course of business of the Company and its Restricted Subsidiaries and (D) deferred payments under power rate deferral programs of the British Columbia Hydro and Power Authority;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a Guarantee check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days;
(13) Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with any acquisition or disposition of any business, assets or a Subsidiary of the Company in accordance with the terms of this Indenture, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, however, that is not a Guarantor, the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiary complies Subsidiaries in connection with Section 4.16such disposition;
(914) the incurrence by the Company or any of its Restricted Subsidiaries of obligations consisting of take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business; and
(15) 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 renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed the greater of (x) US$50.0 million and (y) 8.0% of Consolidated Tangible Assets.
(c) The Company will not incur, and will not permit any 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 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 Company or such Guarantor solely by virtue of being unsecured, by virtue of being secured on a junior priority basis or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more such holders priority over the other holders in the collateral held by them.
(d) For purposes of determining compliance with this Section 4.08, in the event that an item of Indebtedness meets the criteria of more than one of the clauses of Permitted Debt described in clauses (1) through (15) of Section 4.08(b), or is entitled to be incurred pursuant to Section 4.08(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.08. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock or operating leases as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.08; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Company or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this Section 4.08 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Taseko Mines LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), 210.0 million; less the aggregate amount of all Net Proceeds repayments, optional or mandatory (including, without limitation, with proceeds from an Asset Sale), of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case principal of any revolving credit term Indebtedness under a Credit Facility, Facility (other than repayments that are concurrently refunded or refinanced) that have been made by the Company or any of its Restricted Subsidiaries since the date of this Indenture and less the aggregate amount of all commitment reductions with respect to effect any revolving credit borrowings under a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in Credit Facility that have been made by the case Company or any of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsits Restricted Subsidiaries since the date of this Indenture;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed the greater of $20.0 million or 3.0% of Consolidated Total Assets at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (1619) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) (1) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of any Disqualified Stock or preferred stockStock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockDisqualified Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 issued, as the case may be, would have been at least 2.00 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, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x1) $385.0 65.0 million and (y2) the amount of the Credit Facilities Borrowing Base as of the date of such incurrenceBase, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of the indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsObligations and Purchase Money Indebtedness, in each case, incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $15.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (9), (12), (13), (14), (15) or (16) of this Section 4.10(b4.09(b);.
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Banking Services Obligations and Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09(b); provided thatthat 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;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance, bid and surety bonds and completion guarantees in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12) not to exceed the greater of (x) $15.0 million or (y) the amount of the Foreign Subsidiaries Borrowing Base as of the date of such incurrence;
(13) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business consistent with past practices;
(14) Indebtedness consisting of the financing of insurance premiums;
(15) Indebtedness consisting of Guarantees incurred in the ordinary course of business consistent with past practices under repurchase agreements or similar agreements in connection with the sales of goods in the ordinary course of business; and
(16) 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 renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $15.0 million.
(c) The Company will not incur, and will not permit any 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 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 Company solely by virtue of being unsecured or by virtue of being secured on junior priority basis.
(d) For purposes of determining compliance with this Section 4.09, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) of Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
(94.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by Section 4.09(b)(1) the hereof. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any United States dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item United States dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Company or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (TB Wood's INC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall not, and shall not permit Neither the Company nor any of its Restricted Subsidiaries toGuarantor will, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and none of the Issuer Guarantors will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Leverage Ratio and the Secured Leverage Ratio for the IssuerCompany’s most 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 issued, as the case may be, would have been at least 2.00 no greater than 3.0 to 11.0 in respect of the Leverage Ratio and 1.5 to 1.0 in respect of the Secured Leverage Ratio, 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-four quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of the Guarantors of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors thereunder) not to exceed the greater of (x) $385.0 100.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of the Guarantors since the date of this Indenture to repay any term Indebtedness under a Credit Facilities (and, in the case of Facility or to repay any revolving credit Indebtedness under a Credit Facility, to Facility and effect a corresponding commitment reduction thereunder) thereunder pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions4.10 hereof;
(2) the incurrence by the Issuer or any Company and the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer or any of its Restricted Subsidiaries Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), ) and (4), (5), (15) or (16) of this Section 4.10(b4.09(b);
(65) the incurrence by the Issuer Company or any of its Restricted Subsidiaries the Guarantors of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiariesthe Guarantors; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (iA) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and Guarantor and
(iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofGuarantor, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (5);
(6) the issuance by any of the Guarantors to the Company or to any of the Guarantors 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 Guarantor; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Guarantor, will be deemed, in each case, to constitute an issuance of such preferred stock by such Guarantor that was not permitted by this clause (6);
(7) the incurrence guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Guarantor that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(8) the incurrence by the Company or any of the Guarantors of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds, appeal or other similar bonds in the ordinary course of business, and in any such case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16reimbursement obligations in connection therewith;
(9) the accrual of interest, incurrence by the accretion Company or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 Guarantors of Indebtedness arising from the honoring by a bank or an issuance other financial institution of Disqualified Stock a check, draft or preferred stock for purposes of this Section 4.10; providedsimilar instrument inadvertently drawn against insufficient funds, in each so long as such case, that the amount thereof Indebtedness is included in Fixed Charges of the Issuer as accruedcovered within five Business Days;
(10) the incurrence by the Issuer’s Unrestricted Subsidiaries Company or any 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 the Guarantors of Indebtedness represented by a Restricted Subsidiary Capital Lease Obligations, purchase money obligations or other obligations, in each case incurred for the purpose of financing all or any part of the Issuer that was not permitted by purchase price, cost or value of any equipment used in the business of the Company or any of the Guarantors, 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 (10), not to exceed $25.0 million at any time outstanding;
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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 incurrenceHedging Obligations;
(12) Indebtedness of the incurrence by the Issuer Company or any of its Restricted Subsidiaries the Guarantors to the extent the net proceeds thereof are promptly deposited to defease or satisfy and discharge all outstanding Notes in full as provided in Articles 8 and 12 hereof;
(13) obligations of Indebtedness the Company and any of the Guarantors arising from agreements of the Issuer Company or such Restricted Subsidiary a Guarantor providing for indemnification, adjustment of purchase price or similar obligations, in each case, case incurred or assumed in connection with the disposition of any business, assets or Capital Stock a Subsidiary of the Issuer or a Restricted SubsidiaryCompany in accordance with the terms of this Indenture, other than Guarantees by the Company or any Guarantor of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary of the Company for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on provided, however, that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable aggregate liability in respect of that Indebtedness all such obligations shall at no time not exceed the gross proceeds proceeds, including the fair market value as determined in good faith by the Board of Directors of the Company of non-cash proceeds (the fair market value of those such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) ), actually received by the Issuer and/or that Restricted Subsidiary Company and the Guarantors in connection with that such disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);or
(14) obligations of the incurrence by Company and any of the Issuer Guarantors arising from the entering into, maintaining or disposing of, Core Investments, including, without limitation, purchasing of any Core Investment on margin, any capital call obligations, make-well arrangements, hedging obligations of any nature or any obligations regarding a short position in any of its Restricted Subsidiaries such Core Investments. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of obligations in respect payment to any other Indebtedness of performance and surety bonds and completion Guarantees provided by the Issuer Company or such Restricted Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in the ordinary course right of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal payment to the maximum potential liability of Notes and the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee on substantially identical terms; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedhowever, that after giving effect no Indebtedness will be deemed to be contractually subordinated in right of payment to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company solely by virtue of being unsecured or any Restricted Subsidiary supported by virtue of being secured on a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit first or collection in the ordinary course of businessjunior Lien basis. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2214) above, or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of this Indenture shall which Notes are first issued and authenticated under the indenture will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of Permitted Debt. Indebtedness permitted by this covenant need not be permitted 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 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).4.09 permitting such
Appears in 1 contract
Sources: Indenture (Vector Group LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock Stock, and the Issuer Company will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer Company and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the any Restricted Subsidiaries Subsidiary may issue preferred stock, if the Fixed Charge Coverage Ratio if, for the IssuerCompany’s most 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 issued, the Fixed Charge Coverage Ratio would have been at least 2.00 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):) or the issuance of any Disqualified Stock or preferred securities described below:
(1) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of additional Indebtedness (including guarantees and letters of credit) under one or more Credit Facilities (and Facilities; provided that, after giving effect to any such incurrence, the incurrence by the Guarantors of Guarantees thereof) in an 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 Company and the Guarantors its Subsidiaries thereunder) and then outstanding does not to exceed the greater of (xa) $385.0 150.0 million and (yb) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsBase;
(2) the incurrence by the Issuer Company or any Guarantors its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Initial Notes to be issued on and the date of this Indenture and related Note Subsidiary Guarantees;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness (including Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations) or the issuance by the Company or any of its Restricted Subsidiaries of Disqualified Stock or the issuance by any Restricted Subsidiary of preferred stock, in each case, incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation, repair or improvement, improvement of property (real or personal), plant or equipment or other assets used in the business of the Issuer Company or any of its such Restricted Subsidiaries, Subsidiary (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount), including all Permitted Refinancing Indebtedness incurred to refundextend, refinance refinance, renew, replace, defease or replace 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 to exceed, at any time outstanding, exceed the greater of (xa) $30.0 35.0 million or and (yb) 35.0% of the Company’s Consolidated Net Tangible Assets of the Issuerat such time;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refundto, refinance extend, refinance, renew, replace, defease or replace refund Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture hereunder to be incurred or Disqualified Stock or preferred stock permitted to be issued under Section 4.10(a4.09(a) hereof or clauses clause (2), (3), (4), (512), (1513) or (1619) of this Section 4.10(b4.09(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that Guarantor is not a Guarantorthe obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations obligations with respect to the Notes, or if a Guarantor is the obligor on such Indebtedness and neither the Company 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 case Subsidiary Guarantee of the Issuer, or the Note Guarantee, in the case of a such Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer or Company nor a Restricted Subsidiary thereof, shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations under Hedging Obligations that are incurred Contracts in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness including any obligations with respect to letters of the obligor outstanding at any time other than as a result of fluctuations credit issued in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderconnection therewith;
(8) the Guarantee guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a any of its Restricted Subsidiary of the Issuer Subsidiaries that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(10) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company 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 Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any preferred securities; 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 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 4.09(b)(11);
(i) Indebtedness, Disqualified Stock or preferred stock of the Company or a Restricted Subsidiary incurred or issued to finance an acquisition or merger or (ii) Acquired Debt incurred by the Company or a Restricted Subsidiary; provided that, in in either case, after giving effect to the related merger or acquisition transaction, on a pro forma basis, either (a) the Company 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 (b) the Fixed Charge Coverage Ratio for the Company would not be less than immediately prior to such transactions;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness; provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness, including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred under this clause (13), does not exceed, at any one time outstanding, the greater of $35.0 million and 5.0% of the Company’s Consolidated Net Tangible Assets determined as of the date of such incurrence;
(14) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of self-insurance obligations, financing of insurance premiums, obligations to pay insurance premiums or take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(15) Indebtedness in respect of any bankers’ acceptances, bank guarantees, letters of credit, warehouse receipts or similar facilities, and reinvestment obligations related thereto, entered into in the ordinary course of business including without limitation letters of credit issued (a) in connection with the purchase of crude oil or feedstock in the ordinary course of business and/or (b) pursuant to letters of credit in connection with the purchase of foreign crude oil or feedstock;
(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 permitted hereunder;
(17) Indebtedness incurred in connection with any Sale and Leaseback Transaction in an aggregate principal amount not to exceed the greater of (a) $35.0 million and (b) 5.0% of the Company’s Consolidated Net Tangible Assets and any refinancing, refunding, renewal or extension of any such Indebtedness; provided that, except to the extent otherwise permitted hereunder, the principal amount of any such Indebtedness is not increased above the principal amount thereof outstanding immediately prior to such refinancing, refunding, renewal or extension and the direct and contingent obligors with respect to such Indebtedness are not changed;
(18) cash management obligations and other Indebtedness in respect of overdraft protections, netting services, automatic clearinghouse arrangements, and similar arrangements in each case in connection with deposit accounts;
(19) Indebtedness arising from agreements of the Company or any Restricted Subsidiary providing for indemnification, holdback, adjustment of purchase price, earn out or similar obligations, in each case, incurred or assumed in connection with the acquisition or 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; provided, however, that the maximum assumable liability in respect of all such Indebtedness incurred or assumed in connection with such disposition shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Company and the Restricted Subsidiaries in connection with such disposition;
(20) Indebtedness of the Company or any of the Restricted Subsidiaries supported by a letter of credit issued pursuant to Credit Facilities, in a principal amount not in excess of the stated amount of such letter of credit;
(21) Indebtedness of the Company or any of the Restricted Subsidiaries undertaken in connection with cash management and related activities with respect to any Subsidiary or Joint Venture in the ordinary course of business;
(22) Unsecured Indebtedness of the Company or any of the Restricted Subsidiaries that is contractually subordinated to the Notes and the Subsidiary Guarantees in an aggregate principal amount not to exceed $50.0 million;
(23) Indebtedness incurred in connection with any Hawaii Retail Property Sale and Leaseback Transaction (including Indebtedness represented by Capital Lease Obligations or Attributable Debt), and any amendments, renewals, extensions, refundings, restructurings, replacements or refinancings of such Indebtedness, in whole or in part, and whether with the original counterparties to such Hawaii Retail Property Sale and Leaseback Transaction or one or more replacement or additional counterparties; provided that the aggregate principal amount of Indebtedness incurred in connection with any Hawaii Retail Property Sale and Leaseback Transactions is reasonably equivalent to the fair market value of the Hawaii Retail Property that is the subject of such Sale and Leaseback Transactions;
(24) to the extent constituting Indebtedness, obligations under any Intermediation Agreement or any guarantee provided by the Company in respect of any Intermediation Agreement, including Permitted Refinancing Indebtedness in respect thereof; and
(25) Indebtedness incurred in connection with Environmental and Necessary Capex in an amount not to exceed the greater of $40.0 million and 2.0% of Consolidated Net Tangible Assets (at the time incurred) at any time outstanding in the aggregate. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness (including Acquired Debt), Disqualified Stock or preferred stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (25) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to divide and classify (or later divide, classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness, Disqualified Stock or preferred stock in any manner that complies with this Section 4.09 (including in part pursuant to one or more clauses and/or in part pursuant to Section 4.09(a) hereof). Any Indebtedness under the ABL Facility shall be considered incurred under Section 4.09(b)(1) hereof and may not be later classified or reclassified pursuant to Section 4.09(a) hereof.
(c) The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; providedprovided that, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) . Further, the incurrence by the Issuer’s Unrestricted Subsidiaries accounting reclassification 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 obligation of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness constituting reimbursement for purposes of this Section 4.09.
(d) For purposes of determining any particular amount of Indebtedness, any guarantees, Liens or 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationscredit, in each case, incurred or assumed supporting Indebtedness otherwise included in connection with the disposition determination of such particular amount, will not be included. In addition, notwithstanding any businessother provision of this Section 4.09, assets or Capital Stock of the Issuer or a Restricted Subsidiary, other than Guarantees maximum amount of Indebtedness that may be incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet this Section 4.09 will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in exceeded, with respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued outstanding Indebtedness, due solely to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer result of fluctuations in the exchange rates of currencies. The principal amount of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refundrefinance other Indebtedness, refinance or replace any if incurred in a different currency from the Indebtedness incurred pursuant to this clause (15)being refinanced, not to exceed $75.0 million;
(16) shall be calculated based on the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal currency exchange rate applicable to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing currencies in which such respective Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary is denominated that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer Company will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock ), and the Company's Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 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 Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuer or Company and any Guarantor of its Restricted Subsidiaries of Indebtedness and letters of credit under the New Senior Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Facility 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 100.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor commitment reductions with respect to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in borrowings that have been made by the case Company or any of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsits Restricted Subsidiaries since the date of this Indenture;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries 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 Note GuaranteesSubsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness of Tilia assumed as part of the Acquisition; provided that such Indebtedness was not incurred in connection with or in contemplation of the Acquisition;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in an amount not to exceed $15.0 million pursuant to promissory notes issued to the shareholders of Tilia in payment of a portion of the consideration for the Acquisition; provided that such Indebtedness is subordinated to the Notes to at least the same extent as the Notes are subordinated to Senior Debt;
(6) 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (46), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(57) the incurrence by the Issuer 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 is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (156), (7) or (1612) of this Section 4.10(b4.09(b);
(6) 8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(b) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, swapping or hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or with respect to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and Indebtedness that do not increase is permitted by the Indebtedness terms of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderthis Indenture to be outstanding;
(8) 10) the Guarantee guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(911) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;and
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) 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 refund, refinance or replace any Indebtedness incurred pursuant to this clause (1512), not to exceed $75.0 25.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2212) above, or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under the New Senior Credit Agreement Facility outstanding on the date of on which Notes are first issued and authenticated under this Indenture shall will be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 Permitted Debt. To the extent that the Company has incurred any Indebtedness since April 24, 2002 such that its capacity to incur additional Indebtedness under the 2002 Indenture has been reduced, corresponding reductions shall be deemed for purposes of made to the foregoing provisions so that the Company's capacity to incur Indebtedness pursuant to this covenant Indenture is identical to have been incurred on the date such Company's capacity to incur Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed pursuant to be borrowed, repaid and reborrowed daily (or otherwise periodically)the 2002 Indenture.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Domestic Restricted Subsidiaries and any other Guarantors may incur Indebtedness or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most recently ended four eight full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock or Disqualified Stock or preferred stock is issued would have been at least 2.00 2.0 to 11.0, 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 Preferred Stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such foureight-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Notwithstanding the foregoing, clause (a) of this Section 4.10(a) 4.09 will not prohibit the incurrence or issuance of any of the following items of Indebtedness or Preferred Stock (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Company or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees any replacements, renewals, refinancings, extensions, defeasements or amendments thereof) in an aggregate principal amount at any one time outstanding as of the date of any such incurrence under this clause (with letters of credit being deemed 1) not to have a principal exceed an amount equal to the maximum potential liability greater of (x) $1.5 billion, less the aggregate amount of all Net Proceeds of Asset Sales (other than a sale of all or a substantial portion of the Issuer assets used in or related to the Turkey Operations) applied by the Company or any of its Subsidiaries to repay Indebtedness incurred under this clause (1) pursuant to Section 4.12 and (y) 75% of the Guarantors thereunderfair market value of property, plant, equipment and intangibles (excluding goodwill) of the Company and its consolidated Restricted Subsidiaries;
(2) the incurrence by the Company or any Restricted Subsidiary of Indebtedness pursuant to a revolving credit facility under the Existing U.S. Credit Facilities (and any replacements, renewals, refinancings, extensions, defeasements or amendments of any thereof) in an aggregate principal amount at any one time outstanding as of the date of any such incurrence under this clause (2) not to exceed the Domestic Borrowing Base;
(3) the incurrence of Indebtedness by the Foreign Restricted Subsidiaries pursuant to the Existing Foreign Credit Facility (and any replacements, renewals, refinancings, extensions, defeasements or amendments thereof) in an aggregate principal amount outstanding at any one time as of the date of any such incurrence under this clause (3) not to exceed the greater of (x) $385.0 100.0 million and (y) the amount of the Foreign Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note GuaranteesBase;
(4) the incurrence by the Issuer or Company and the Guarantors (including any of its Restricted Subsidiaries future Guarantor) of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsthe Notes (including, 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 (real or personalSubsidiary Guarantees), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of purchase money obligations incurred in the ordinary course of business in an amount outstanding at any one time (including any Permitted Refinancing Indebtedness incurred pursuant to clause (10) below) as of the date of any such incurrence not to exceed 75% of the purchase price or fair market value of the asset purchased, acquired or constructed;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Capital Lease Obligations incurred in the ordinary course of business in an amount outstanding at any one time (including any Permitted Refinancing Indebtedness incurred pursuant to clause (10) below) as of the date of any such incurrence not to exceed 5% of the Company’s Consolidated Net Worth;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations pursuant to which the Company or the Restricted Subsidiary has hedged against its actual exposure to fluctuations in interest rates, currency values or commodity prices;
(8) the incurrence by the Company or any Restricted Subsidiary of up to $25.0 million aggregate principal amount of Indebtedness to the Camp County Industrial Development Corporation pursuant to that certain Loan Agreement (the “Camp County Loan Agreement”), dated as of June 15, 1999, between the Company and the Camp County Industrial Development Corporation, including the incurrence by the Company or any Restricted Subsidiary to ▇▇▇▇▇▇ Trust and Savings Bank pursuant to the Reimbursement Agreement dated June 15, 1999 between the Company and ▇▇▇▇▇▇ Trust and Savings Bank, or under any irrevocable letter of credit, surety bond, insurance policy or other similar instrument issued by any Person to support the Company’s or any Restricted Subsidiary’s Obligations pursuant to the Camp County Loan Agreement or in connection with the related bonds issued by the Camp County Industrial Development Corporation (and reimbursement and similar agreements in respect thereof) and any Permitted Refinancing Indebtedness relating thereto; provided, that such $25.0 million and any corresponding credit enhancement or reimbursement obligation with respect thereto shall be reduced by any prepayments or scheduled payments under the Camp County Loan Agreement;
(9) 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 any Permitted Refinancing Indebtedness incurred pursuant to clause (10) below) under this clause (9) not to exceed, immediately after giving effect to any such incurrence, the greater of (x) $150.0 million and (y) 5.0% of Total Assets;
(10) 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 refinance, replace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) under this Indenture, the Senior Notes, the Senior Notes Indenture, the Subordinated Notes or the Subordinated Notes Indenture or that is was permitted by this Indenture to be incurred under paragraph (a) of this Section 4.10(a) 4.09 or clauses (2), (3), (4), (5), (156), (9), (13) or (1620) of this Section 4.10(bparagraph (b);
(611) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness and Intercompany Bonds between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) except in the case of Intercompany Bonds, if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 NotesNote, in the case of the IssuerCompany, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (611);
(712) the incurrence Senior Guarantee, the Subordinated Guarantee and the Guarantee by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided thatcovenant and, in the case of a Guarantee Domestic Restricted Subsidiary, the provisions of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.17;
(913) Indebtedness of the Company to the extent the net proceeds thereof are promptly (a) used to purchase Notes tendered in a Change of Control Offer made as a result of a Change of Control in accordance with this Indenture or (b) deposited to defease the Notes in accordance with Section 8.04 hereof;
(14) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(1015) the issuance of Preferred Stock to the Company or a Wholly-Owned Restricted Subsidiary;
(16) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness 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 claims, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-insuranceinsurance obligations, reclamation, statutory obligations, bankers’ acceptances, performance, surety or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such similar bonds and letters of credit or completion or performance guarantees or equipment leases, or other similar obligations in the incurrence ordinary course of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrencebusiness and consistent with past practice;
(1217) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements the honoring by a bank or other financial institution of the Issuer a check, draft or such Restricted Subsidiary providing for indemnification, adjustment similar instrument inadvertently drawn against insufficient funds;
(18) Indebtedness constituted of obligations in respect of purchase price adjustments, Guarantees or similar obligations, in each case, incurred or assumed indemnities in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer 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 in accordance with the purpose of financing such acquisition; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes terms of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that dispositionIndenture;
(1319) the issuance of Disqualified Stock accounts payable or preferred stock by any other obligations of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided to trade creditors created or assumed by the Issuer Company or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred business in connection with a Qualified Receivables Transactionthe obtaining of goods and services; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;and
(20) Indebtedness constituting a Permitted Capital Raising Transaction and Indebtedness under the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Bridge Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessAgreement. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2220) above, or is entitled to be incurred pursuant to paragraph (a) of this Section 4.10(a)4.09, the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. covenant; provided, that (x) Indebtedness outstanding under the Existing U.S. Credit Agreement Facilities on the date of this Indenture shall will be deemed to have been incurred on such date pursuant in reliance on the exception provided in clauses (1) and (2), as applicable, of paragraph (b) of this Section 4.09 and (y) Indebtedness outstanding under Existing Foreign Credit Facility on the date of this Indenture will be deemed to Section 4.10(b)(1). Any Indebtedness have been incurred under Credit Facilities pursuant to on such date in reliance on the exception provided in clause (13) of paragraph (b) of this Section 4.10 shall 4.09.
(c) The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued.
(d) With respect to Indebtedness denominated in a currency other than United States dollars, the Company or any of its Restricted Subsidiaries shall not have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)incur Indebtedness solely as a result of fluctuations in the exchange rates of currencies.
Appears in 1 contract
Sources: Senior Unsecured Term Loan Agreement (Pilgrims Pride Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Issuer Company nor any Restricted Subsidiary will not issue any Disqualified Stock Stock, and the Issuer Company will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer Company and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may issue preferred stockStock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 2.5 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a3.3(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuer Company or any Guarantor of its Restricted Subsidiaries of Indebtedness (including letters of credit) under one or more Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (xi) $385.0 million and 50,000,000 or (yii) the amount 30% of the Borrowing Base Adjusted Consolidated Net Tangible Assets determined as of the date of the incurrence of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsIndebtedness;
(2ii) the incurrence by the Issuer Company or any Guarantors of its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and its Restricted Subsidiaries 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 Note GuaranteesSubsidiary Guarantees to be issued pursuant to any Registration Rights Agreement;
(4iv) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed, exceed $20,000,000 at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer 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 is was permitted by this Indenture to be incurred under Section 4.10(a3.3(a) hereof or clauses clause (2), (3), (4), (5), (15ii) or (16iii) of this Section 4.10(b3.3(b) or this clause (v);
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer or any Guarantor Company is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that Guarantor is not a Guarantorthe 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 Company 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 case Subsidiary Guarantee of the Issuer, or the Note Guarantee, in the case of a such Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer or Company nor a Restricted Subsidiary thereof, shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations Obligations;
(viii) the Guarantee by the Company or any of the Restricted Subsidiaries of Indebtedness of the Company or any Guarantor that are was permitted to be incurred pursuant to Section 3.3(a) or pursuant to clause (i), (iii), (iv), (vi), (vii), (ix), (xi), (xii) or (xiii) of this Section 3.3(b) or pursuant to clause (v) of this Section 3.3(b) to the extent that the Permitted Refinancing Indebtedness incurred thereunder directly or indirectly refinances Indebtedness incurred pursuant to Section 3.3(a) or pursuant to clause (ii) or (iii) of this Section 3.3(b); and
(ix) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderconsistent with past practice;
(8) x) the Guarantee incurrence by the Issuer or Company’s Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any Restricted Subsidiary such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness of the Issuer or by a Restricted Subsidiary of the Issuer Company that was not permitted by this clause (x);
(xi) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including Guarantees and obligations of the Company and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case, other than an obligation for money borrowed);
(xii) 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 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 a Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and
(xiii) 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, not to exceed the greater of $20,000,000 or 5% of Adjusted Consolidated Net Tangible Assets determined as of the date of the incurrence of such Indebtedness. For purposes of determining compliance with this Section 3.3, in the event that an item of Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xiii) of Section 3.3(b) above, or is entitled to be incurred by another provision pursuant to Section 3.3(a) above, the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.10covenant; provided that, in that all Indebtedness outstanding on the case of a Guarantee of any Restricted Subsidiary that is Issue Date under the Credit Agreement shall be deemed incurred under clause (b)(i) above and not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
under clause (9a) the or clause (b)(ii) above. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided3.3. 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 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 casethe case of any other Indebtedness. In addition, that the amount thereof is included in Fixed Charges Company will not permit any of the Issuer as accrued;
(10) the incurrence by the Issuer’s its Unrestricted Subsidiaries to incur any Indebtedness or issue any shares of Disqualified Stock, other than Non-Recourse Debt; provided, however, that if . If at any such Indebtedness ceases to be Non-Recourse Debt of time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such event Subsidiary shall be deemed to constitute an incurrence of Indebtedness be incurred by a Restricted Subsidiary of the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing Company as of such letters of credit or the incurrence of such Indebtednessdate (and, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) if such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed permitted to be reflected on that balance sheet for purposes incurred as of such date under this Section 3.3, the Company shall be in Default of this clause (aSection 3.3)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first incurred until committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is actually repaidincurred to refinance other Indebtedness denominated in a foreign currency, notwithstanding any provisions under any Credit Facility that provide that 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 is being refinanced (plus all accrued interest on the Indebtedness being refinanced and the amount of all expenses and premiums incurred in connection therewith). Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be borrowedexceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, repaid and reborrowed daily (or otherwise periodically)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.
Appears in 1 contract
Sources: Indenture (Venoco, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Holdings will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Holdings will not issue any Disqualified Stock and the Issuer Holdings will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Holdings may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Issuers and any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s Holdings most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence or issuance of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer Indebtedness of Holdings or any Guarantor of Indebtedness Restricted Subsidiary under Credit Facilities (including any Indebtedness represented by the Notes and the incurrence by related Note Guarantees to be issued on the Guarantors date of Guarantees thereofthis Indenture) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit issued thereunder being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions475.0 million;
(2) the incurrence by the Issuer or any Guarantors of the Existing IndebtednessIndebtedness and Existing Preferred Stock;
(3) the incurrence by the Issuer and its Restricted Subsidiaries Indebtedness of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer Holdings or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations (including such Indebtedness as a lessee or guarantor with respect to any lease of property, whether real, personal or mixed), in each case, incurred for the purpose of financing all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Holdings or any of its Restricted Subsidiaries, whether through Subsidiaries or in connection with the direct purchase sale or transfer of assets or the Capital Stock of any Person owning such assetsproperty, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing any Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (43), not to exceed, at any time outstanding, exceed as of the date of incurrence the greater of (xa) $30.0 million or and (yb) 34% of Holdings Consolidated Net Tangible Assets of the IssuerAssets;
(54) the incurrence Permitted Refinancing Indebtedness incurred by the Issuer Holdings 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (56), (1512) or (1613) of this Section 4.10(b4.09(b);
(65) the incurrence by the Issuer intercompany Indebtedness between or among Holdings or any of its Restricted Subsidiaries of intercompany Indebtedness between and owing to and held by Holdings or among the Issuer and any of its Restricted Subsidiaries; provided, however, that:
(aA) if Holdings, the Issuer Issuers or any Restricted Subsidiary of Holdings that is a Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not a GuarantorHoldings, the Issuers or such Restricted Subsidiary, 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 IssuerIssuers, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Holdings or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Holdings or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by the provision described in this clause (5);
(6) shares of preferred stock issued by any of Holdings’ Restricted Subsidiaries to Holdings or to any of its Restricted Subsidiaries; provided, however:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than Holdings or a Restricted Subsidiary of Holdings; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either Holdings or a Restricted Subsidiary of Holdings, 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 (6);
(7) the incurrence Hedging Obligations incurred by the Issuer Holdings or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) the Guarantee by Holdings, the Issuer Issuers or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Holdings or a Restricted Subsidiary of Holdings and the Issuer Guarantee by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary, in each case, that was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, in then the case of a Guarantee of any Restricted Subsidiary that is not a Guarantormust be subordinated or pari passu, such Restricted Subsidiary complies with Section 4.16as applicable, to the same extent as the Indebtedness guaranteed;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence incurred by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer Holdings or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued or evidenced by reimbursement obligations incurred in the ordinary course of business, including, without limitation, including letters of credit in respect of workers’ compensation claims claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or insurance and/or other Indebtedness with respect to reimbursement reimbursement-type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or insurance incurred in the incurrence ordinary course of such Indebtednessbusiness;
(10) Indebtedness of Holdings or any of its Restricted Subsidiaries in respect of workers’ compensation claims, such obligations are reimbursed within 30 days following such drawing self-insurance obligations, bankers’ acceptances, indemnities, performance and surety bonds or incurrenceguarantees in the ordinary course of business or incurred in connection with any Permitted Lien;
(11) Indebtedness of Holdings or any of its Restricted Subsidiaries incurred in the ordinary course of business in connection with cash pooling arrangements, cash management and other Indebtedness incurred in the ordinary course of business in respect of netting services, overdraft protections and similar arrangements (including honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds);
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Indebtedness incurred to renew, refund, refinance, defease or discharge any Indebtedness incurred pursuant to this clause (12) not to exceed $10.0 million (or the Issuer equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency);
(13) (i) Indebtedness or preferred stock of any Person incurred and outstanding on or prior to the date on which such Person was acquired by or merged into Holdings or any of its Restricted Subsidiaries in accordance with the terms of this Indenture or (ii) Indebtedness of Holdings or any of its Restricted Subsidiaries incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the acquisition by Holdings or any such Restricted Subsidiary of property used or useful in the Permitted Business (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Person owning such assets); provided that, after giving effect to such incurrence of Indebtedness Holdings 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;
(14) additional Indebtedness of Holdings or any of its Restricted Subsidiaries in an aggregate principal amount at any time outstanding pursuant to this clause (14), including all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14), not to exceed $35.0 million;
(15) Indebtedness arising from agreements of the Issuer Holdings or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price price, earn-outs or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of the Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(1316) the issuance of Disqualified Stock or preferred stock by any Indebtedness consisting of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer financing of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemedinsurance premiums, in each caseincluding Indebtedness representing installment insurance premiums, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary incurred in the ordinary course of business;
(1517) the incurrence by the Issuer or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred which may be deemed to refund, refinance or replace any Indebtedness incurred exist pursuant to this clause (15)any guaranties, not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder)performance, including all Permitted Refinancing Indebtedness surety, statutory, customs appeal bonds, return-of-money or similar obligations incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(18) Guarantees in the ordinary course of business of the obligations to suppliers, lessees, customers, landlords, franchisees and licensees of Holdings or any of its Restricted Subsidiaries;
(19) Indebtedness relating to unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law;
(20) the incurrence by the Issuer Indebtedness owing to Holdings or another Restricted Subsidiary to finance or assumed in connection with any Foreign Subsidiary Reorganization;
(21) Indebtedness of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer Holdings or any Parent, Restricted Subsidiary to the extent the proceeds of such Indebtedness are deposited and used to defease the Notes as provided for in each case held by any former Article 8 or current employees, officers, directors or consultants 11 hereof;
(22) Indebtedness of the Issuer Holdings or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon arising from the death, disability or termination endorsement of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection instrument in the ordinary course of business. For purposes of determining compliance ;
(23) Indebtedness incurred in connection with a Receivables Facility in an aggregate principal amount at any time outstanding pursuant to this Section 4.10clause (23), in the event that including all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(athis clause (23), the Issuer will be permitted not to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).exceed $50.0 million; and
Appears in 1 contract
Sources: Indenture (SITEL Worldwide Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.25 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness of the incurrence by the Issuer Company or any Guarantor of Indebtedness under Restricted Subsidiary incurred pursuant to one or more Credit Facilities (and including the incurrence by the Guarantors of Guarantees thereofCredit Agreement) in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (xa) $385.0 150.0 million and (yb) the amount 25% of the Borrowing Base Company’s Adjusted Consolidated Net Tangible Assets in either case, determined as of the date of the incurrence of such incurrenceIndebtedness after giving effect to the application of the proceeds therefrom plus, lessall interest, in the case of both clause (x) fees and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction other obligations thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer 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, construction, installation or cost improvement of construction or improvement, of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $20.0 million at any time outstanding; provided that the principal amount of any Indebtedness permitted under this clause (4) did not in each case at the time of incurrence exceed the Fair Market Value, as determined in accordance with the greater definition of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets such term, of the Issueracquired, installed or constructed asset or improvement so financed;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (15) or (1612) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness or the issuance of any Disqualified Stock between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness or Disqualified Stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof of the Company and (ii) any sale or other transfer of any such Indebtedness or Disqualified Stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness or the issuance of any Disqualified Stock, as the case may be, by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock Guarantee must be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the IssuerCompany or any of its Restricted Subsidiaries of Indebtedness in respect of (i) self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and (ii) workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Permitted Acquisition Indebtedness;
(13) 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 will be deemed to constitute an incurrence of Indebtedness by the Company or a Restricted Subsidiary of the Issuer Company that was not permitted by this clause (1013);
(1114) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer Company or such any of its Restricted Subsidiary Subsidiaries 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable aggregate liability in respect of that all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Company and its Restricted Subsidiary Subsidiaries in connection with that such disposition;
(1315) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued Indebtedness to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than extent the Issuer or a Restricted Subsidiary proceeds thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock are used to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)finance insurance premiums;
(1416) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary relating to net gas balancing positions arising in the ordinary course of business;business and consistent with past practice; and
(1517) the incurrence by the Issuer Company or any Guarantor of the Guarantors 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1517), not to exceed exceed, at any time, the greater of (a) $75.0 25.0 million;
, and (16b) the incurrence by the Foreign Restricted Subsidiaries 4.0% of the Issuer of Indebtedness Company’s Adjusted Consolidated Net Tangible Assets, in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability either case determined as of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the date of incurrence of any such Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including incurrence and the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests application of the Issuer or proceeds therefrom. The Company will not incur, and will not permit any ParentGuarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in each case held by right of payment to any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer Company or any Restricted Subsidiary supported by a letter such Guarantor unless such Indebtedness is also contractually subordinated in right of credit issued pursuant payment to the Credit Agreement Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in a principal amount not in excess right of payment to any other Indebtedness of the stated amount Company solely by virtue of such letter being unsecured or by virtue of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessbeing secured on a junior priority basis. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2217) aboveof this Section 4.09(b), or is entitled to be incurred pursuant to Section 4.10(a)4.09(a) hereof, the Issuer Company will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassifyor later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time4.09. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of which Notes are first issued and authenticated under this Indenture shall will initially be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) the definition of this Section 4.10 shall Permitted Debt. The accrual of interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant to have been incurred Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Company or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be borrowedexceeded 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, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)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 the date of determination; and
(b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Energy Partners LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, :
(1) that the Issuer and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Issuer’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-four quarter period; provided, however, that and
(2) if the aggregate amount of Indebtedness or Disqualified Stock that may to be incurred under this paragraph by is Senior Secured Indebtedness, the Issuer and the Restricted Subsidiaries may incur such Senior Secured Indebtedness if, on the date on which such Senior Secured Indebtedness is incurred, the Consolidated Senior Secured Leverage Ratio for the Issuer is less than 3.75 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Senior Secured Indebtedness had been incurred at the beginning of the relevant period. Restricted Subsidiaries that are not Guarantors shall may only incur Indebtedness pursuant to this paragraph if, after giving pro forma effect to such incurrence of Indebtedness, the aggregate amount of Indebtedness of Restricted Subsidiaries that are not Guarantors incurred pursuant to this paragraph would not exceed $50.0 25.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or and any Guarantor of additional Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed the greater of (xi) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence70.0 million, less, plus in the case of both any refinancing of any Indebtedness permitted under this clause (x1) and clause (y)or any portion thereof, the aggregate amount of all Net Proceeds fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing and (ii) 5.6% of Asset Sales, applied by Total Assets.
(2) Indebtedness outstanding on the Issuer or any Guarantor Issue Date and which remains outstanding after giving effect to repay any the use of proceeds of the Notes and Indebtedness incurred under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsPending Finance Facilities;
(2a) the incurrence by the Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date Issue Date, the incurrence by the Guarantors of this Indenture Indebtedness represented by the related Guarantee (including any future Guarantee) and any related Note Guarantees“parallel debt” obligations created in favor of the Security Agent under the Collateral Trust Deed, the North American Intercreditor Agreement, any Additional Intercreditor Agreement or the Security Documents; and (b) any loan or other instrument contributing the proceeds of the Notes issued on the Issue Date;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations or other financings, in each case, incurred for the purpose of financing all or any part of the purchase price, lease, rental or cost of construction design, construction, installation or improvement, improvement of property (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed the greater of $30.0 million and 2.4% of Total Assets at any time outstanding, so long as the greater Indebtedness exists on the date of (x) $30.0 million such purchase, lease, rental or (y) 3% of Consolidated Tangible Assets of the Issuerimprovement or is created within 180 days thereafter;
(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 renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (1516) or (1620) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer and or any of its Restricted SubsidiariesSubsidiary; provided, however, provided that:
(aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the lender is not the Issuer or a Guarantor, such Indebtedness must be unsecured ((i) except in respect of the intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Restricted Subsidiaries and (ii) only to the extent legally permitted (the Issuer and its Restricted Subsidiaries having completed all procedures required in the reasonable judgment of directors of officers of the obligee or obligor to protect such Persons from any penalty or civil or criminal liability in connection with the subordination of such Indebtedness)) 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.09(b)(6);
(7) the issuance by any Restricted Subsidiary to the Issuer or to any of its Restricted Subsidiaries of preferred stock; provided 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 Issuer or a Restricted Subsidiary; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this Section 4.09(b)(7);
(8) the incurrence by the Issuer or any Restricted Subsidiary of Hedging Obligations for bona fide hedging purposes of the Issuer and its Restricted Subsidiaries and not for speculative purposes (as determined in good faith by the Board of Directors or a member of senior management of the Issuer);
(9) the guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or any Restricted Subsidiary to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated to the Notes or subordinated to or pari passu with a Guarantee, then the guarantee must be subordinated, in the case of the Notes, or subordinated or pari passu, as applicable, in the case of a Guarantee, in each case to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred Indebtedness in respect of bankers’ acceptance, workers’ compensation claims, self-insurance obligations, captive insurance companies and the financing of insurance premiums in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10)business;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in arising from the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, 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 with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed is covered within 30 days following such drawing or incurrencefive Business Days;
(12) the incurrence by the Issuer or any of and its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer or such a Restricted Subsidiary providing for customary indemnification, adjustment guarantees, obligations in respect of earnouts or other adjustments of purchase price or or, in each case, similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, business or assets or Capital Stock Person or any Equity Interests of a Subsidiary; provided that in the case of a disposition of any business or assets, the maximum liability of the Issuer or a and its 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability Subsidiaries in respect of that all such Indebtedness shall at no time exceed the gross proceeds proceeds, including the Fair Market Value of non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) ), actually received by the Issuer and/or that and its Restricted Subsidiary Subsidiaries in connection with that such disposition;
(13) the issuance of Disqualified Stock or preferred stock incurrence by any of the Issuer’s Issuer and its Restricted Subsidiaries of Indebtedness in respect of (A) letters of credit, surety, performance, completion, payment, surety, appeal bonds or guarantees, completion guarantees, judgment, advance payment, customs, VAT or other tax guarantees or similar instruments issued to in the Issuer ordinary course of business of such Person and not in connection with the borrowing of money, including letters of credit or another Restricted Subsidiaryother similar instruments in respect of self-insurance and workers compensation obligations; provided provided, however, that upon the drawing of such letters of credit or other similar instrument, such obligations are reimbursed within 30 days following such drawing, and (iB) any subsequent issuance customary cash management, cash pooling or transfer of any Equity Securities that results in such Disqualified Stock netting or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13)setting off arrangements;
(14) Indebtedness of the incurrence Issuer or any of its Restricted Subsidiaries in respect of Management Advances;
(15) take-or-pay obligations and customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(16) Indebtedness (a) incurred by the Issuer or any of its Restricted Subsidiaries and used to finance an acquisition of obligations in respect assets and assumption of performance related liabilities or (b) of any Person outstanding on the date on which such Person becomes a Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and surety bonds and completion Guarantees provided by assumption of related liabilities) the Issuer or any of its Restricted Subsidiaries; provided, however, with respect to this clause (16), that at the time of the acquisition or other transaction pursuant to which such Restricted Subsidiary Indebtedness was deemed to be incurred (x) the Issuer would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof and, if the Indebtedness incurred increases Senior Secured Indebtedness, the Issuer would have been able to incur $1.00 of additional Indebtedness pursuant to clause (2) of Section 4.09(a) hereof, in each case, after giving pro forma effect to the ordinary course incurrence of businesssuch Indebtedness pursuant to this clause (16) or (y) the Fixed Charge Coverage Ratio of the Issuer would not be less than and the Consolidated Leverage Ratio of the Issuer would not be more than it was immediately prior to giving pro forma effect to the incurrence of such Indebtedness pursuant to this clause (16);
(1517) 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1517), not to exceed the greater of $75.0 million35.0 million and 2.9% of Total Assets;
(1618) the incurrence Indebtedness incurred by the Foreign any Restricted Subsidiaries of the Issuer of Indebtedness under local overdraft and other local facilities in an aggregate principal amount not to exceed, at any one time outstanding (with letters outstanding, $30.0 million; provided that in respect of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16)18) in excess of $20.0 million by Restricted Subsidiaries that are not Guarantors, such Indebtedness will be Non-Recourse Debt with respect to the Issuer and its Restricted Subsidiaries other than the obligor under such Indebtedness and its Restricted Subsidiaries that are not to exceed $50.0 millionGuarantors;
(1719) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred and its Restricted Subsidiaries in connection with a any Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(1820) Equity Proceeds Debt; and
(21) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries after the Issuer Date and prior to the Escrow Release for the purpose of financing all or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon a portion of the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);Rexam Acquisition.
(21c) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.104.09, in the event that any proposed an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2221) above, of Section 4.09(b) or is entitled to be incurred pursuant to Section 4.10(a4.09(a), the Issuer Issuer, in its sole discretion, will be permitted to classify such item of Indebtedness on the date of its incurrence, incurrence and only be required to include the amount and type of such Indebtedness in one of such clauses and will be permitted on the date of such incurrence to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Sections 4.09(a) and (b) and from time to time may reclassifyto reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any 4.09; provided that Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph Section 4.09(b) may not be reclassified.
(bd) The accrual of this Section 4.10 shall interest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this covenant to have been incurred Section 4.09.
(e) For purposes of determining compliance with any euro-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent or euro-equivalent principal amount of Indebtedness denominated in a different currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first incurred until committed, in the case of revolving credit Indebtedness; provided, however, that (i) if such Indebtedness denominated in non-euro or non-U.S. dollar currency is actually repaidsubject to a Currency Exchange Protection Agreement with respect to U.S. dollars or euro, notwithstanding any provisions under any Credit Facility that provide that the amount of such Indebtedness is deemed expressed in U.S. dollars or euro, as applicable, will be calculated so as to take account of the effects of such Currency Exchange Protection Agreement; and (ii) the U.S. dollar-equivalent or euro-equivalent of the principal amount of any such Indebtedness outstanding on the Issue Date shall be borrowedcalculated based on the relevant currency exchange rate in effect on the Issue Date. The principal amount of any refinancing Indebtedness incurred in the same currency as the Indebtedness being refinanced will be the U.S. dollar-equivalent or euro-equivalent of the Indebtedness refinanced, repaid and reborrowed daily (as applicable, determined on the date such Indebtedness was originally incurred, in the case of term Indebtedness, or otherwise periodically).first committed, in the case of revo
Appears in 1 contract
Sources: Indenture (Twist Beauty S.a r.l. & Partners S.C.A.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the or preferred stock of a Restricted Subsidiaries may issue preferred stockSubsidiary, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 of a Restricted Subsidiary is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock of a Restricted Subsidiary had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.11(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiary of Indebtedness (including letters of credit) under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of:
(i) $800.0 million; and
(ii) an amount equal to the sum of (xA) $385.0 600.0 million and plus (yB) the amount 10% of the Borrowing Base Adjusted Consolidated Net Tangible Assets determined as of the date of the incurrence of such incurrence, less, in Indebtedness after giving pro forma effect to such incurrence and the case application of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsproceeds therefrom;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees to be issued on the date Issue Date (including any increase in principal amount as a result of this Indenture a PIK Payment and any PIK Interest Notes in respect thereof) and (b) the New Third Lien Notes and the related Note Guaranteesguarantees thereof issued on the Issue Date (including any increase in principal amount and any PIK interest notes in respect thereof, in each case as a result of a PIK payment);
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $50.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.11(a) hereof or clauses (2), (3), (4), (5), (15) or (1611) of this Section 4.10(b4.11(b) or this clause (5);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereof, shall of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business;
(9) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions arising in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderconsistent with past practice;
(8) 10) the Guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.11; provided thatthat if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(11) Permitted Acquisition Indebtedness;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(13) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries;
(14) 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 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 a Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(15) the incurrence by the 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 and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company 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); and
(16) 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 not to exceed $100.0 million.
(c) The Company will not incur, and will not permit any 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 applicable Note Guarantee on substantially identical terms; 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 or by virtue of being secured on a first or junior Lien basis.
(d) Notwithstanding the foregoing, the Company and its Restricted Subsidiaries will not incur any Indebtedness secured by a Priority Lien unless the principal amount of such Indebtedness is pari passu in right of payment with the principal amount of all other Indebtedness secured by a Priority Lien. For purposes of determining compliance with this Section 4.11, in the case event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above or is entitled to be incurred pursuant to Section 4.11(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.11; provided that any Indebtedness outstanding on the Issue Date incurred under the Existing Revolving Credit Agreement and the 1.5 Lien Term Loan Agreement shall be considered incurred under clause (91) of the definition of Permitted Debt and may not be later reclassified. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.11, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.11 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause fluctuations in exchange rates or currency values.
(a))e) 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
(b3) the maximum assumable liability in respect of that Indebtedness shall at no time exceed of another Person secured by a Lien on the gross proceeds including non-cash proceeds (assets of the fair market value of those non-cash proceeds being measured at specified Person, the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;lesser of:
(13A) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance Fair Market Value of such shares asset at such date of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of creditdetermination; and
(22B) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one amount of the categories Indebtedness of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)other Person.
Appears in 1 contract
Sources: Indenture (W&t Offshore Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall notNeither Parent nor the Company will, and shall not neither of them will permit any of its the Restricted Subsidiaries or any Other Guarantor to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and none of Parent, the Issuer Company, any of the Restricted Subsidiaries or any Other Guarantor will not issue any Disqualified Stock Stock, and the Issuer Company will not not, and neither Parent nor the Company, will permit any of its the Restricted Subsidiaries to or any Other Guarantor to, issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries that:
(1) Parent or any Other Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries any Other Guarantor may issue shares of preferred stock, if the Fixed Charge Consolidated Interest Coverage Ratio of Parent and its Subsidiaries on a consolidated basis, for the Issuer’s most 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, as the case may be, would have been at least 2.0 to 1; or
(2) the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or other shares of preferred stock, if the ratio of total Indebtedness to Consolidated Cash Flow for the Company and the Restricted Subsidiaries on a consolidated basis for the most 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 other shares of preferred stock is issued issued, as the case may be, would have been at least 2.00 less than 2.5 to 1, in each case determined on a pro forma basis (including a pro forma application of the net proceeds Net Proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or other shares of preferred stock had been issued, as the case may be, at on the beginning first day of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.08(a) (“Incurrence of Indebtedness and Issuance of Preferred Stock”) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (Company and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding additional Indebtedness and letters of credit under a Credit Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors thereunder) in a maximum aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions200.0 million;
(2) the incurrence by the Issuer or Company and any Guarantors Guarantor of Indebtedness represented by (a) the Existing IndebtednessNotes and the related Note Guarantees to be issued on the Issue Date and the exchange notes and related Note Guarantees to be issued pursuant to the Registration Rights Agreement and (b) the Term Loan Facility (and any guarantees thereof) in an aggregate principal amount for this clause 2(b) at any one time outstanding not to exceed $500.0 million;
(3) the incurrence by Parent, the Issuer Company, any Other Guarantor or any Restricted Subsidiary of Existing Indebtedness (other than Indebtedness described in clauses (1) and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date (2) of this Indenture and related Note GuaranteesSection 4.08(b));
(4) the incurrence by Parent, the Issuer Company, the Restricted Subsidiaries or any of its Restricted Subsidiaries Other Guarantor 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company, the Restricted Subsidiaries or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsOther Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $10.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) Indebtedness of (a) Parent or any Other Guarantor (b) the Company and the Restricted Subsidiaries incurred and outstanding on or prior to the date on which a new Subsidiary was acquired by Parent, any Other Guarantor, the Company or such Restricted Subsidiary (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by Parent, an Other Guarantor, the Company or such Restricted Subsidiary); provided, however, that (a) on the date that such Subsidiary is acquired by, or is merged into the Company, such Restricted Subsidiary or such Other Guarantor, Parent or the Company, as applicable, would have been able to incur at least $1.00 of additional Indebtedness pursuant to the applicable ratio set forth in clause (a)(1) or (a)(2), as the case may be, of this Section 4.08 after giving effect to the incurrence of such Indebtedness pursuant to this clause (5); and (b) the new Subsidiary becomes a Restricted Subsidiary and a Guarantor or an Other Guarantor;
(6) the incurrence by Parent, the Issuer Company, any Restricted Subsidiary or any of its Restricted Subsidiaries Other Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds Net Proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) or clauses (2), ) (3), (4), (5), (15) or this clause (16) of this Section 4.10(b6);
(67) the incurrence by (a) the Issuer Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Issuer Company and the Restricted Subsidiaries or (b) Parent or any Other Guarantor of its Restricted Subsidiariesintercompany Indebtedness between or among Parent and the Other Guarantors; provided, however, that:
(a1) if (A) the Issuer Company or any Restricted Subsidiary is the obligor on such Indebtedness and the payee is not the Company or a Restricted Subsidiary or (B) Parent or any Other Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not a Parent or an Other Guarantor, as applicable, 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 the Issuer, or Notes and the Note Guarantee, in the case of a GuarantorGuarantees; and
(b) (i2) any (A) subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Issuer or Company, a Restricted Subsidiary thereof and or an Other Guarantor, or (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Issuer or Company, a Restricted Subsidiary thereofor Other Guarantor, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by Parent, the Issuer Company, such Restricted Subsidiary or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (67);
(7) 8) the incurrence by Parent, the Issuer Company, any Restricted Subsidiary or any of its Restricted Subsidiaries an Other Guarantor of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by Parent, the Issuer or Company, any Restricted Subsidiary or any Other Guarantor of Indebtedness of Parent, the Issuer or a Company, any Restricted Subsidiary of the Issuer or any Other Guarantor that was permitted to be incurred by another provision of this Section 4.104.08; provided that, in that if the case of a Guarantee of any Restricted Subsidiary that Indebtedness being guaranteed is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion subordinated to or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness pari passu with the same termsNotes, and then the payment of dividends on Disqualified Stock guarantee shall be subordinated or preferred stock in the form of additional shares of pari passu, as applicable, to the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of extent as the Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accruedguaranteed;
(10) the incurrence by the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if Company or 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 Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, and performance and surety bonds in the Issuer that was not permitted by this clause (10)ordinary course of business;
(11) the incurrence by Parent, the Issuer Company, any Restricted Subsidiary or any of its Restricted Subsidiaries Other Guarantor of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in arising from the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, 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 with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed is covered within 30 days following such drawing or incurrencefive Business Days;
(12) the incurrence by Parent, the Issuer Company, any Restricted Subsidiary or any of its Restricted Subsidiaries Other Guarantor of Indebtedness arising from agreements of the Issuer or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or guarantees or letters of credit, surety bonds or performance bonds securing any obligations of Parent, the Company, any Restricted Subsidiary or any Other Guarantor pursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition of any business, assets or Capital Stock of the Issuer or a Restricted Subsidiary, Subsidiary (other than Guarantees guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary for the purpose of financing such acquisition; provided that:
(a) such Indebtedness is ), so long as the amount does not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by Parent, the Issuer and/or that Company, any Restricted Subsidiary or any Other Guarantor in connection with that such disposition;; and
(13) the issuance of Disqualified Stock or preferred stock incurrence by Parent, the Company, any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Other 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 refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1513), not to exceed $75.0 125.0 million;
(16) . None of Parent, the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at Company or any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Other Guarantor will incur any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17including Permitted Debt) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse contractually subordinated in right of payment to any other Indebtedness of Parent, the Company or such Restricted Subsidiary or Other Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Issuer or any other Restricted Subsidiary of Notes and the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transactionapplicable Note Guarantee on substantially identical terms; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; providedhowever, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of no Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured or by virtue of being secured on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically)a junior Lien basis.
Appears in 1 contract
Sources: Indenture (Vantage Drilling CO)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Issuer will not issue any Disqualified Stock and the Issuer Company will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the may permit a Restricted Subsidiaries may issue preferred stock, Subsidiary to incur Indebtedness if the Fixed Charge Coverage Ratio for the Issuer’s most 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 2.00 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 Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning time of such four-quarter period; provided, however, that incurrence and after giving effect thereto the aggregate amount of Indebtedness or Disqualified Stock that may Leverage Ratio would be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) less than 6.5 to 1.0. The foregoing limitations will not prohibit the incurrence of any of the following items of Indebtedness apply to (collectively, “Permitted Debt”):
(1a) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) Senior Bank Debt in an aggregate principal amount not to exceed $100.0 million at any one time outstanding outstanding, (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (yb) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied issuance by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities Restricted Subsidiaries of Subsidiary Guarantees, (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2c) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
, (3d) the issuance by the Company of the Notes, (e) the incurrence by the Issuer Company and its Restricted Subsidiaries of Capital Lease Obligations and/or additional Indebtedness constituting purchase money obligations up to an aggregate of $5.0 million at any one time outstanding, provided that the Liens securing such Indebtedness constitute Permitted Liens, (f) the incurrence of Indebtedness between (i) the Company and its Restricted Subsidiaries and (ii) the Restricted Subsidiaries, (g) 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, (h) the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date arising out of this Indenture letters of credit, performance bonds, surety bonds and related Note Guarantees;
(4) the incurrence by the Issuer 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 (real or personal), plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is permitted by this Indenture to be incurred under Section 4.10(a) or clauses (2), (3), (4), (5), (15) or (16) of this Section 4.10(b);
(6) 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:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer or a Restricted Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are bankers' acceptances incurred in the ordinary course of business for the purpose up to an aggregate of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding $5.0 million at any one time other than as a result of fluctuations in interest ratesoutstanding, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10i) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of Company and its Restricted Subsidiaries of Indebtedness constituting reimbursement consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with respect to letters the acquisition or disposition of credit issued in the ordinary course of businessassets, including, without limitation, letters shares of credit in respect of workers’ compensation claims or self-insuranceCapital Stock, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
and (12j) the incurrence by the Issuer or any of Company and its Restricted Subsidiaries of Refinancing Indebtedness arising from agreements issued in exchange for, or the proceeds of the Issuer which are used to repay, redeem, defease, extend, refinance, renew, replace or such Restricted Subsidiary providing for indemnificationrefund, 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements clauses (b) through (e) above, and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodicallyj).
Appears in 1 contract
Sources: Indenture (Iron Mountain Inc /De)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall C▇▇▇▇▇▇ will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and the Issuer and C▇▇▇▇▇▇ will not issue any preferred stock or Disqualified Stock Stock, respectively, and the Issuer C▇▇▇▇▇▇ will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries C▇▇▇▇▇▇ may incur Incur Indebtedness (including Acquired Debt) or issue preferred stock or Disqualified Stock Stock, and the Restricted Subsidiaries Issuer and the Subsidiary Guarantors may Incur Indebtedness or issue preferred stockstock or Disqualified Stock, if the Fixed Charge Coverage Ratio for the Issuer’s C▇▇▇▇▇▇’▇ most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred Incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.00 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 Incurred or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Paragraph (a) of this Section 4.10(a) 4.09 will not prohibit the incurrence Incurrence of any Indebtedness by the Issuer or any of the following items Guarantors under or in respect of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit and letters of guarantee being deemed to have a principal amount equal to the maximum potential liability of the Issuer C▇▇▇▇▇▇ and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of of:
(xA) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrenceCdn$345 million, less, in the case of both clause (x) and clause (y), less the aggregate amount of all Net Proceeds of Asset Sales, Sales that have been applied by the Issuer C▇▇▇▇▇▇ or any Guarantor of its Restricted Subsidiaries since the Issue Date to permanently repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit term Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) Facility pursuant to Section 4.13 4.10 hereof and less, in less the case aggregate amount of both clause all commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by C▇▇▇▇▇▇ or any of its Restricted Subsidiaries since the Issue Date as a result of the application of Net Proceeds of Asset Sales pursuant to Section 4.10 hereof; and
(xB) and clause (y), amounts outstanding under any Qualified Receivables TransactionsCdn$150 million plus 25% of Adjusted Consolidated Net Tangible Assets as of the last day of the fiscal quarter for which internal financial statements are available immediately preceding the date on which such Indebtedness is Incurred;
(2) the incurrence by the Issuer Existing Indebtedness (other than Indebtedness described under clause (1), (3) or any Guarantors (6) of the Existing Indebtednessthis Section 4.09(b));
(3) the incurrence by Notes and the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes related Guarantees to be issued on the date of this Indenture Issue Date and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred Incurred for the purpose of financing all or any part of the purchase price, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsGuarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred Incurred to refund, refinance or replace any Indebtedness incurred Incurred pursuant to this clause (4), not to exceed, exceed US$25.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(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 refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred Incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (15) or (1613) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer C▇▇▇▇▇▇ and any of its Restricted Subsidiaries, including the intercompany Indebtedness referred to in the last sentence of the definition of “Existing Indebtedness”; provided, however, that:
(aA) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that is not a Guarantor, such Indebtedness must be unsecured and, except for the Acquired 9.90% Notes, expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Issuer, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer C▇▇▇▇▇▇ or a Restricted Subsidiary thereof of C▇▇▇▇▇▇ and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer C▇▇▇▇▇▇ or a Restricted Subsidiary thereofof C▇▇▇▇▇▇, shall ▇▇▇▇ be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Issuer C▇▇▇▇▇▇ or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) Hedging Obligations, provided that such Hedging Obligations were Incurred in the incurrence ordinary course of business and not for speculative purposes;
(8) the guarantee by the Issuer or any of its Restricted Subsidiaries the Guarantors of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices C▇▇▇▇▇▇ or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any another Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer C▇▇▇▇▇▇ that was permitted to be incurred Incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.09;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 Incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer C▇▇▇▇▇▇ as accrued;
(10) Indebtedness and Obligations under Oil and Gas Hedging Contracts, provided that such Contracts were entered into in the incurrence by the Issuer’s Unrestricted Subsidiaries ordinary course 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 Issuer that was business and not permitted by this clause (10)for speculative purposes;
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness production imbalances arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(1512) standby letters of credit, guarantees, performance or surety bond or other reimbursement obligations, in each case, issued in the incurrence 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 the Issuer such letter of credit, guarantee or any Guarantor of performance or surety bond itself);
(13) additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred Incurred to refund, refinance or replace any Indebtedness incurred Incurred pursuant to this clause (1513), not to exceed $75.0 US$30.0 million;
(1614) the incurrence by the Foreign Restricted Subsidiaries Indebtedness of Compton or the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability extent that the net proceeds thereof are promptly (A) used to purchase Notes tendered in a Change of Control Offer or (B) deposited to defease or to satisfy and discharge the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;Notes; and
(1715) Indebtedness arising from the incurrence of any Indebtedness honoring by a Receivables Subsidiary that is not recourse to the Issuer bank or any other Restricted Subsidiary financial institution of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; providedcheck, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer draft or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection similar instrument drawn against insufficient funds in the ordinary course of business;
(20) the incurrence ; provided, however, that such Indebtedness is extinguished within five Business Days after receipt of notice of its Incurrence by the Issuer of Indebtedness to effect the repurchaseor Guarantor, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessas applicable. For purposes of determining compliance with this Section 4.104.09, in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (2215) above, or is entitled to be incurred Incurred pursuant to Section 4.10(a4.09(a), C▇▇▇▇▇▇ or the Issuer applicable Restricted Subsidiary will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in whole or in part in any manner that complies with the applicable part of this Section 4.10 4.09, including by allocation to more than one other type of Indebtedness. In addition, any Indebtedness originally classified as Incurred pursuant to clauses (1) through (15) above may later be reclassified by the Issuer such that it will be deemed as having been Incurred pursuant to another of such clauses to the extent that such reclassified Indebtedness could be Incurred pursuant to such new clause at the time of such timereclassification. Notwithstanding the foregoing, Indebtedness under Credit Facilities outstanding on the Credit Agreement on date of this Indenture shall Issue Date will be deemed to have been incurred Incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1) of paragraph (b) this Section 4.09(b). Notwithstanding any other provision of this Section 4.10 shall 4.09, the maximum amount of Indebtedness that may be deemed for purposes of Incurred pursuant to this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is Section 4.09 will not be deemed to be borrowedexceeded with respect to any outstanding Indebtedness due solely to the result of fluctuations in currency exchange rates.
(c) Neither C▇▇▇▇▇▇ nor the Issuer will Incur any additional Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of C▇▇▇▇▇▇ or the Issuer, repaid and reborrowed daily (respectively, unless such additional Indebtedness is also contractually subordinated in right of payment to the Parent Guarantee or otherwise periodically)the Notes, as applicable, on substantially identical terms. Neither C▇▇▇▇▇▇ nor the Issuer will permit any Subsidiary Guarantor to Incur any Indebtedness that is subordinated in right of payment to any other Indebtedness of such Subsidiary Guarantor unless it is subordinated in right of payment to such Subsidiary Guarantor’s Subsidiary Guarantee on substantially identical terms. For purposes of the foregoing, no Indebtedness of the Issuer or any Guarantor will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuer or such Guarantor solely by reason of any Liens or guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerCompany’s most 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 Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuer or Company and any Subsidiary Guarantor of additional Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) ), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (1), not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales, Sales applied by the Issuer Company or any Guarantor of its Restricted Subsidiaries since the date of this Supplemental Indenture to repay any term Indebtedness or debt securities under Credit Facilities (and, in the case of or to repay any revolving credit Indebtedness under a Credit Facility, to Facilities and effect a corresponding commitment reduction thereunder) , in each case pursuant to Section 4.13 4.10 hereof and less(y) 300% of the Consolidated Cash Flow of the Company and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available; provided, in however, that the case of both maximum amount permitted to be outstanding under this clause (x1) and clause (y), amounts outstanding shall not be deemed to limit additional Indebtedness under the Credit Facilities to the extent that the incurrence of such additional Indebtedness is permitted pursuant to any Qualified Receivables Transactionsof the other provisions of this Section 4.09;
(2) the incurrence by the Issuer or Company and its Restricted Subsidiaries of any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Supplemental Indenture and the related Note Guarantees;
(4) the incurrence by the Issuer 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceedexceed 5.0% of the Company’s Total Assets, at any time outstanding; provided, however, that the greater of maximum amount permitted to be outstanding under this clause (x4) $30.0 million or (y) 3% of Consolidated Tangible Assets shall not be deemed to limit additional Indebtedness of the Issuertype described in this clause (4) to the extent that the incurrence of such additional Indebtedness is permitted pursuant to any of the other provisions of this section (including, without limitation, clauses (1) and (2) of this Section 4.09);
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Supplemental Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15), (19) or (1624) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Issuer Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Company or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereof of the Company, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, HoldCo, the Issuer Company or a Restricted Subsidiary thereofof the Company, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, HoldCo, the Company or a Restricted Subsidiary of the Company, or a Guarantor, 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company that was permitted to be incurred by another provision of this Section 4.104.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Company or any of its Restricted Subsidiaries;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued on behalf of Royal Street in accordance with the Royal Street Agreements or in connection with any Permitted Joint Venture Investment;
(13) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Company’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (13), at any time outstanding not to exceed $100.0 million;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of Contribution Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (including Acquired Debt or Indebtedness) used to finance an acquisition or a merger with another Person, provided that, the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Company immediately prior to such transaction;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary thereof in connection with such disposition;
(17) the incurrence by the Company or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided that, in upon the case drawing of a Guarantee such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(18) the incurrence by the Company or any Restricted Subsidiary of Indebtedness to the extent that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes;
(919) the incurrence by the Company or any Restricted Subsidiary of Indebtedness of Royal Street or its Subsidiaries existing on the date of this Supplemental Indenture (or Indebtedness of Royal Street or its Subsidiaries to the extent comprised of Capital Lease Obligations, which were converted from operating leases existing on the date of this Supplemental Indenture) as a result of Royal Street or its Subsidiaries merging into, or becoming, a Restricted Subsidiary;
(20) the incurrence by the Company or any of the Subsidiary Guarantors 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 (20), not to exceed $100.0 million.
(21) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(22) the incurrence by the Company or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Notes and the Note Guarantees issued to current or former employees or directors of Parent, the Company or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an amount equal to the amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (5) of Section 4.07(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(23) the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business; and
(24) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Company or any Restricted Subsidiary of such Indebtedness. The Company will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by clause (6) above) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Subsidiary 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 shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of such Indebtedness being unsecured or by virtue of such Indebtedness being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (24) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on the date on which the Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt, and the Notes will initially be deemed to have been incurred on the date of this Supplemental Indenture in reliance on the exception provided by clause (3) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges Consolidated Interest Expense of the Issuer Company as accrued;
(10) . Notwithstanding any other provision of this Section 4.09, the incurrence by the Issuer’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 maximum amount of Indebtedness by a Restricted Subsidiary of that the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Company or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 4.09 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); and
(b) the maximum assumable liability fluctuations in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock exchange rates or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).currency valu
Appears in 1 contract
Sources: Second Supplemental Indenture (Metropcs Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Borrower will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockshares of Preferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Debt to Cash Flow Ratio for the IssuerBorrower’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 no greater than 6.0 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) The provisions of Section 4.10(a6.3(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):), nor will it prohibit the Borrower’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1i) the incurrence by the Issuer or Borrower and any Subsidiary Guarantor of (A) Indebtedness pursuant to any Loan Document (including Indebtedness under Credit Facilities any Incremental Facility, Replacement Facility and Extended Term Loans) and any Incremental Equivalent Debt incurred in accordance with Section 2.23, and (and the incurrence by the Guarantors of Guarantees thereofB) in an aggregate principal amount at without duplication, all Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any one time outstanding (with letters of credit being deemed to have a principal amount equal Indebtedness incurred pursuant to the maximum potential liability of the Issuer and the Guarantors thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both foregoing clause (x) and clause (yA), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2ii) the incurrence by the Issuer or Borrower and its Restricted Subsidiaries of any Guarantors of the Existing IndebtednessDebt;
(3iii) the incurrence by the Issuer Borrower and its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness represented by the Senior Notes issued prior to the Closing Date, and any related Registered Equivalent Notes to be issued on in exchange therefor, and, in each case, the date of this Indenture and related Note GuaranteesGuarantees thereof;
(4iv) the incurrence by the Issuer Borrower 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 prior to or within 270 days after) all or any part of the purchase price, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets used in the business of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 million or 2.5 billion and (y) 35.0% of Consolidated Tangible Assets the Borrower’s Total Assets, at the time of the Issuerany such incurrence pursuant to this clause (iv);
(5v) the incurrence by the Issuer Borrower 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture Annex to be incurred under Section 4.10(a6.3(a) hereof or clauses (2ii), (3iii), (4iv), (5v), (15xiii), (xiv), (xv), (xxiv) or (16xxv) of this Section 4.10(b6.3(b);
(6vi) the incurrence by the Issuer Borrower or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, the Issuer Borrower and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(aA) if the Issuer Borrower or any Subsidiary Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Borrower 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 NotesTerm Loans, in the case of the IssuerBorrower, or the Note GuaranteeGuarantee of the Term Loans, in the case of a Subsidiary Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Parent, the Issuer Borrower or a Restricted Subsidiary thereof of the Borrower, or a Guarantor and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either Parent, the Issuer Borrower or a Restricted Subsidiary thereofof the Borrower, shall or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Borrower or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the Borrower’s Restricted Subsidiaries to the Borrower 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 Parent, the Borrower or a Restricted Subsidiary of the Borrower or a Guarantor; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either Parent, the Borrower or a Restricted Subsidiary of the Borrower, or a Guarantor, 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 (vii);
(viii) the incurrence by the Issuer Borrower or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not other than for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder);
(8) ix) the Guarantee guarantee by the Issuer Borrower or any Restricted of the Subsidiary Guarantors of Indebtedness of the Issuer Borrower or a Restricted Subsidiary of the Issuer Borrower that was permitted to be incurred by another provision of this Section 4.106.3; provided, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Term Loans, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(x) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or injunctive relief bonds or similar bonds or obligations in the ordinary course of business, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
(xi) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness arising from (A) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days of notice to the Borrower or any of its Restricted Subsidiaries, (B) in respect of netting, overdraft protection and other arrangements arising under standard business terms of any bank at which the Borrower or any Restricted Subsidiary maintains an overdraft, cash pooling or other similar facility or arrangement or (C) in respect of the financing of insurance premiums in the ordinary course of business, provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (B) and (C) of this paragraph shall not, at any time outstanding exceed $250.0 million;
(xii) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit required to be issued in connection with any Permitted Joint Venture Investment;
(xiii) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness for relocation or clearing obligations relating to the Borrower’s or any of its Restricted Subsidiary’s FCC Licenses in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xiii), at any time outstanding not to exceed the greater of (x) $400.0 million and (y) 1.0% of the Borrower’s Total Assets, at the time of such incurrence;
(xiv) the incurrence by the Borrower or any of its Restricted Subsidiaries of Contribution Indebtedness;
(xv) the incurrence by the Borrower or any of its Restricted Subsidiaries of (A) Indebtedness (including Acquired Debt) used to finance an acquisition of or a merger with another Person, provided that, the Borrower or the Person formed by or surviving any such consolidation or merger (if other than the Borrower or a Restricted Subsidiary), on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, would either (a) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 6.3(a) hereof or (b) have a Debt to Cash Flow Ratio no greater than the Debt to Cash Flow Ratio of the Borrower immediately prior to such transaction, or (B) Indebtedness secured by Liens permitted by clauses (c) and (d) of the definition of Permitted Liens;
(xvi) the incurrence by the Borrower or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Borrower or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of a Guarantee any business, assets or Restricted Subsidiary (other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Borrower or any Restricted Subsidiary that is not a Guarantor, thereof in connection with such Restricted Subsidiary complies with Section 4.16disposition;
(9xvii) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business; provided, that, upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(xviii) [Reserved];
(xix) the incurrence by the Borrower or any of the Subsidiary Guarantors 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 (xix), not to exceed the greater of (x) $1.0 billion and (y) 2.0% of the Borrower’s Total Assets as of the time of incurrence;
(xx) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(xxi) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness evidenced by promissory notes subordinated to the Obligations issued to current or former employees or directors of Parent, the Borrower or any Subsidiary (or their respective spouses or estates) in lieu of cash payments for Capital Stock being repurchased from such Persons, not to exceed, in any twelve-month period, an amount equal to the amount of Restricted Payments that could be made during such twelve-month period pursuant to clause (v) of Section 6.1(b) hereof less the amount of Restricted Payments that have been made during such twelve-month period pursuant to such clause;
(xxii) the incurrence by the Borrower or any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(xxiii) to the extent that deposits with, or payments owed to, the FCC in connection with the auction or licensing of Governmental Authorizations are deemed to be Indebtedness, the incurrence by the Borrower or any Restricted Subsidiary of such Indebtedness;
(xxiv) Indebtedness incurred in connection with the Towers Transaction; and
(xxv) the incurrence by Restricted Subsidiaries that are not Guarantors of Indebtedness; provided, however, that the aggregate principal amount (or accreted value, as applicable) of all Indebtedness incurred under this clause (xxv), when aggregated with the principal amount (or accreted value) of all other Indebtedness then outstanding and incurred pursuant to this clause (xxv), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xxv), does not exceed the greater of (x) $250.0 million and (y) 5.0% of the Consolidated Cash Flow of the Borrower and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available. The Borrower will not incur, and will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt, but excluding Indebtedness permitted by clause (vi) above) that is contractually subordinated in right of payment to any other Indebtedness of the Borrower or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Term Loans and the applicable Guarantees of the Term Loans on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Borrower or any Subsidiary Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of such Indebtedness being secured on a first or junior Lien basis. For purposes of (x) determining compliance with this Section 6.3, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xxv) above, or is entitled to be incurred pursuant to Section 6.3(a) hereof, the Borrower will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 6.3 and (y) determining the amount of Indebtedness that may be incurred pursuant to clause (i)(A)(y) of Section 6.3(b), the Borrower may elect, pursuant to an Officers’ Certificate delivered to the Administrative Agent, to treat all or any portion of the commitment under any Indebtedness (and any refinancing with respect thereto) as being incurred at such time, in which case any subsequent incurrence of Indebtedness under such commitment or refinancing, as the case may be, shall not be deemed, for purposes of this calculation, to be an incurrence at such subsequent time. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles or the application thereof, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided6.3. Notwithstanding any other provision of this Section 6.3, in each such case, the maximum amount of Indebtedness that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer Borrower or any Restricted Subsidiary (contingent obligations referred may incur pursuant to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will this Section 6.3 shall not be deemed to be reflected on that balance sheet for purposes exceeded solely as a result of this clause (a)); and
(b) fluctuations in exchange rates or currency values, and in no event shall the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer reclassification of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale lease or other transfer of any such shares of Disqualified Stock or preferred stock liability as indebtedness due to a Person that is not either change in accounting principles after the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall Closing Date be deemed to have been incurred on such date pursuant to Section 4.10(b)(1)be an incurrence of Indebtedness. Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on In determining the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).a
Appears in 1 contract
Sources: Secured Revolving Credit Agreement (T-Mobile US, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Partnership will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Partnership will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerPartnership’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Issuers and any Guarantor of Indebtedness under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder1) not to exceed the greater of (x) $385.0 300.0 million and (y) the an amount of Secured Indebtedness that would not cause the Borrowing Base as Senior Secured Leverage Ratio for the Partnership’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such Secured Indebtedness is incurred to exceed 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the date net proceeds therefrom), as if the Secured Indebtedness had been incurred at the beginning of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactionsfour-quarter period;
(2) the incurrence by the Issuer or any Guarantors Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Issuers and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and related Note GuaranteesIndenture;
(4) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of (i) Indebtedness represented of any Person in existence on the date such Person becomes a Restricted Subsidiary as a result of an acquisition by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all Partnership or any part Restricted Subsidiary or (ii) Indebtedness of the purchase pricePartnership or any Restricted Subsidiary incurred to finance the acquisition, construction, development, design or cost improvement of construction or improvement, of property any assets (real or personal), plant or equipment used including Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations, Disqualified Stock, synthetic lease obligations and any Indebtedness assumed in connection with the business of the Issuer or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock acquisition of any Person owning such assets, in an assets (real or personal) or secured by a Lien on any such assets before the acquisition thereof; provided that the aggregate principal amountamount of Indebtedness outstanding at any time and permitted by this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), shall not to exceed, at any time outstanding, exceed the greater of (x) $30.0 200.0 million or and (y) 315% of Consolidated Net Tangible Assets (determined at the time of the Issuerincurrence);
(5) the incurrence by the Issuer Partnership 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses clause (2), (3), (4), (5), (1512), (13) or (1618) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Partnership and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Partnership or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Partnership 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 IssuerPartnership, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 the Issuer Partnership or a Restricted Subsidiary thereofof the Partnership, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Partnership’s Restricted Subsidiaries to the Partnership or to any of its Restricted Subsidiaries of any 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 Partnership or a Restricted Subsidiary of the Partnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Partnership or a Restricted Subsidiary of the Partnership, 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 (7);
(8) the incurrence by the Issuer Partnership or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) 9) the Guarantee by the Issuer Partnership or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Partnership or a Restricted Subsidiary of the Issuer Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09(b); provided thatthat 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;
(10) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness in connection with one or more standby or trade-related letters of credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations, workers’ compensation claims, health or other types of social security benefits, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, in the case ordinary course of business or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances;
(11) the incurrence by the Partnership or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a Guarantee check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of the Partnership or any Restricted Subsidiary that is incurred in connection with any sale and leaseback transaction, provided the Attributable Debt with respect to all sale and leaseback transactions in the aggregate at any one time outstanding shall not a Guarantor, exceed the greater of (x) $30.0 million and (y) 2.5% of Consolidated Net Tangible Assets (determined at the time of incurrence of such Restricted Subsidiary complies with Section 4.16Attributable Debt);
(913) the incurrence by the Partnership or its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(14) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness arising from agreements of the Partnership or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;
(15) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums;
(16) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness that is contractually subordinated in right of payment to the Notes or to any Note Guarantee in an aggregate principal amount not to exceed at any one time outstanding $25.0 million;
(17) the incurrence by the Partnership or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary of the Partnership or any Joint Venture but only to the extent that such liability is the result of the Partnership’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness and provided that after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (17) and then outstanding does not exceed $25.0 million; and
(18) the incurrence by the Partnership or any Guarantor of additional Indebtedness, the issuance by the Partnership of any Disqualified Stock or the issuance by any Guarantor of any Preferred Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred or Disqualified Stock or Preferred Stock issued to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (18), not to exceed the greater of (x) $100.0 million and (y) 7.5% of Consolidated Net Tangible Assets determined on the date of such incurrence or issuance. The Partnership will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Partnership or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes or 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 Partnership or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (18) above, or is entitled to be incurred or issued pursuant to Section 4.09(a) hereof, the Partnership will be permitted to classify such item of Indebtedness, Disqualified Stock or Preferred Stock on the date of its incurrence or issuance, or later reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock 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 initially be deemed to have been incurred on such date in reliance on the exception provided by Section 4.09(b)(1). The accrual of interestinterest or Preferred Stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Stock or preferred stock in the form of additional shares securities 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Partnership as accrued;
(10) accrued to the incurrence extent required by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing definition of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessterm. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Partnership or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, repaid and reborrowed daily in the case of any Indebtedness issued with original issue discount;
(or otherwise periodically)b) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if in each case the Fixed Charge Coverage Ratio for the Issuer’s Company's most 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 2.00 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors Section 4.09 shall not exceed $50.0 million.
(b) Section 4.10(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuer or Company and any Guarantor Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed $950.0 million less any mandatory prepayments actually made thereunder (to the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, lessextent, in the case of both clause (x) and clause (y), the aggregate amount payments of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit FacilityIndebtedness, to effect a that the corresponding commitment reduction thereundercommitments have been permanently reduced) pursuant to Section 4.13 and less, in or scheduled payments actually made thereunder (other than the case repayment of both clause (x) and clause (ythe Interim Term Loan using the net proceeds from the sale of the Initial Notes), amounts outstanding under any Qualified Receivables Transactions;
(2ii) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes and the related Guaranties to be issued on the date of this Indenture and the Exchange Notes and the related Note GuaranteesGuaranties to be issued pursuant to the Registration Rights Agreement (including the Exchange Notes and related Guaranties to be issued in exchange for the Existing Notes);
(4iv) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its such Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed, exceed 5% of Total Assets at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5v) the incurrence by the Issuer 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 replace, Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (15v) or (16x) of this Section 4.10(b)paragraph;
(6vi) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 IssuerCompany, or the Note GuaranteeGuaranty of such Guarantor, in the case of a Guarantor; and
(b) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Company or a Restricted Subsidiary thereof, thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).Company
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or preferred stockPreferred Stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such Preferred Stock is issued issued, as the case may be, would have been at least 2.00 to 11.00, 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 the Disqualified Stock or preferred stock the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor Company and the Restricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (xi) $385.0 million and 1,800.0 million, (yii) the amount of the Borrowing Base as at such time, and (iii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer or any Guarantors Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture Issue Date, and the related Note Guaranteesguarantees;
(4) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Finance 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, price or other acquisition cost or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (xi) $30.0 450.0 million or and (yii) 33.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the Issuerdate of such incurrence or issuance;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) or clauses (2), (3), (4), (5), (15) or (1614) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company or a Guarantor, such Indebtedness (excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money)) 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderObligations;
(8) 9) the Guarantee by the Issuer Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat 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;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary in the ordinary course of business or as required by requirements of law or governmental authorities and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or as required by requirements of law or governmental authorities;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within ten Business Days;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in the ordinary course of business consisting of obligations owed to insurance providers or the financing of insurance premiums;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock 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 or Disqualified Stock issued pursuant to this clause (16), not to exceed, at any one time oustanding, the greater of (i) $650.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) customer deposits and advance payments received in the ordinary course of business or consistent with industry practice from customers for goods and services purchased in the ordinary course of business or consistent with industry practice;
(18) the incurrence of (a) Indebtedness owed to banks and other financial institutions incurred in the ordinary course of business or consistent with industry practice in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries and (b) Indebtedness in respect of or undertaken in connection with Treasury Management Services, including Treasury Management Obligations, in each case, with respect to the Company, any Subsidiaries or any Joint Venture;
(19) the incurrence of Indebtedness by the Company or any Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited with the Trustee to satisfy and discharge the Notes in accordance with this Indenture; and
(a) guarantees incurred in the ordinary course of business or consistent with industry practice in respect of obligations to suppliers, customers, franchisees, lessors, licensees, sub-licensees, and distribution partners and guarantees required by governmental authorities in the ordinary course of business; and (b) the incurrence of any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligation incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture. For purposes of determining compliance with this Section 4.09, in the case event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (20) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a Guarantee portion of such item of Indebtedness, in any Restricted Subsidiary manner that is not a Guarantor, such Restricted Subsidiary complies with this Section 4.16;
4.09. Indebtedness under the Credit Agreement outstanding on or prior to the Issue Date will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (91) of the definition of Permitted Debt. The accrual of interestinterest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock or preferred stock in the form of additional shares securities 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, provided that the amount thereof is shall be included in Fixed Charges of the Issuer Company as accrued;
(10) accrued to the incurrence extent required by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that, upon the drawing definition of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 term. The amount of any business, assets or Capital Stock Indebtedness outstanding as of the Issuer 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; provided thatdate will be:
(a) such Indebtedness is not reflected on the balance sheet accreted value of the Issuer or Indebtedness, in the case of any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); andIndebtedness issued with original issue discount;
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any principal amount of the Issuer’s Restricted Subsidiaries issued to Indebtedness, in the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer case of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22c) contingent liabilities arising out in respect of endorsements Indebtedness of checks and another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other negotiable instruments for deposit or collection in the ordinary course of businessPerson. For purposes of determining compliance with this Section 4.10any U.S. dollar-denominated restriction on the incurrence of Indebtedness or issuance of Disqualified Stock or Preferred Stock, the U.S. dollar-equivalent principal amount of Indebtedness, liquidation preference of Disqualified Stock or amount of Preferred Stock denominated in a foreign currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness, Disqualified Stock or Preferred Stock was incurred or issued (or, in the event that any proposed Indebtedness meets the criteria case of more than one of the categories of Permitted Debt described in clauses (1) through (22) aboverevolving credit debt, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first committed or first incurred until (whichever yields the lower U.S. dollar equivalent)); provided that if such Indebtedness is actually repaidincurred or Disqualified Stock or Preferred Stock is issued to refinance other Indebtedness, notwithstanding Disqualified Stock or Preferred Stock, as applicable, 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 will be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness, Disqualified Stock or Preferred Stock does not exceed (1) the principal amount of such Indebtedness, the liquidation preference of such Disqualified Stock or the amount of such Preferred Stock, as applicable, being refinanced, extended, replaced, refunded, renewed or defeased, plus (2) any provisions accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased, plus (3) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such refinanced Indebtedness, Preferred Stock or Disqualified Stock and any Credit Facility defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness, Preferred Stock or Disqualified Stock. The principal amount of any Indebtedness incurred or Disqualified Stock or Preferred Stock issued to refinance other Indebtedness, Disqualified Stock or Preferred Stock, if incurred or issued in a different currency from the Indebtedness, Disqualified Stock or Preferred Stock, as applicable, being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness, Disqualified Stock or Preferred Stock is denominated that provide is in effect on the date of such refinancing. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date will be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP. If any Indebtedness is incurred, or Disqualified Stock or Preferred Stock is issued, in reliance on a basket measured by reference to a percentage of Adjusted Consolidated Net Tangible Assets, and any refinancing thereof would cause the percentage of Adjusted Consolidated Net Tangible Assets to be exceeded if calculated based on the Adjusted Consolidated Net Tangible Assets on the date of such refinancing, such percentage of Adjusted Consolidated Net Tangible Assets will not be deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).exceeded to the extent the principal amount of such newly incu
Appears in 1 contract
Sources: Indenture (Civitas Resources, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Company will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Company will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 such preferred stock is issued issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, provided further that the aggregate amount of Indebtedness Company or Disqualified Stock that any Restricted Subsidiary may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 millionincur Qualified Acquisition Indebtedness.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or Company and any Guarantor of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) 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 Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 50.0 million and (y) the amount 15.0% of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables TransactionsConsolidated Tangible Assets;
(2) the incurrence by the Issuer or any Guarantors ▇▇▇▇▇▇▇ and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by ▇▇▇▇▇▇▇ and the Issuer and its Restricted Subsidiaries Guarantors of Indebtedness represented by the Existing ▇▇▇▇▇▇▇ Notes to be and the related note guarantees issued on the date of this Indenture and related Note Guaranteesthe Existing ▇▇▇▇▇▇▇ Indenture;
(4) the incurrence by the Issuer 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, price or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed, exceed $5.0 million at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5) the incurrence by the Issuer 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 refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15) or (16) of this Section 4.10(b4.09(b);
(6) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer 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 Issuer Company or a Restricted Subsidiary thereofof the Company, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 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 (7);
(8) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderbusiness;
(8) 9) the Guarantee guarantee by the Issuer Company or any Restricted Subsidiary of the Guarantors of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer Company and the guarantee by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary, in each case, to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.104.09; provided thatthat 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;
(10) the incurrence by the Company or any of its Restricted of Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, performance and surety bonds in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments, earn-outs or similar obligations in connection with the acquisition or disposition of assets or a Subsidiary;
(13) Indebtedness or Disqualified Stock of Persons (other than Indebtedness or Disqualified Stock incurred in anticipation of such acquisition or merger) that are acquired by the Company or any Restricted Subsidiary or merged into the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, either (a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio as provided under this Section 4.09 or (b) the Fixed Charge Coverage Ratio would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition;
(14) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (14), 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 $10.0 million (or the equivalent thereof, measured at the time of each incurrence, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16applicable foreign currency);
(915) the incurrence by the Company or any of the Guarantors 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 (15), not to exceed $5.0 million; and
(16) the incurrence by the Company of additional subordinated 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 such subordinated Indebtedness incurred pursuant to this clause (16), not to exceed $10.0 million. The Company will not incur, and will not permit any 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 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 solely by virtue of being unsecured or by virtue of being secured on a junior priority basis. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (16) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities (including ABL Obligations) outstanding on the date of the Existing ▇▇▇▇▇▇▇ Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on 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 or preferred stock for purposes of this Section 4.104.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in any U.S. dollar-denominated restriction on the event that any proposed Indebtedness meets the criteria incurrence of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a)Indebtedness, the Issuer will be permitted to classify such item U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the date of its incurrence, and from time to time may reclassify, relevant currency exchange rate in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred effect on the date such Indebtedness was first incurred until such incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness is actually repaid, notwithstanding that the Company or any provisions under any Credit Facility that provide that such Indebtedness is Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be borrowedexceeded solely as a result of fluctuations in exchange rates or currency values. Notwithstanding the foregoing or anything else to the contrary contained in this Indenture, repaid prior to the completion of the Special Redemption or the merger of GNET with and reborrowed daily into ▇▇▇▇▇▇▇ in connection with the completion of the Merger, the Company will not incur any Indebtedness, other than the Notes, or issue any Disqualified Stock under any circumstances. The amount of any Indebtedness outstanding as of any date will be:
(or otherwise periodically)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 the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer will Company shall not issue any Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer Company and the any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock and the any Restricted Subsidiaries Subsidiary may issue preferred stock, stock (including Disqualified Stock) if the Fixed Charge Coverage Ratio for the IssuerCompany’s most 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 2.00 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, however, that the aggregate amount . The first paragraph of Indebtedness or Disqualified Stock that may be incurred under this paragraph by Restricted Subsidiaries that are not Guarantors shall not exceed $50.0 million.
(b) Section 4.10(a) 4.07 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1a) the incurrence by the Issuer or any Guarantor Company and its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (and the incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding under this clause (a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer Company and the Guarantors its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $385.0 million and (y) the amount of the Borrowing Base as of the date of such incurrence, less, in the case of both clause (x) and clause (y), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions2,000 million;
(2b) Existing Indebtedness;
(c) the incurrence by the Issuer or any Company and the Guarantors of Indebtedness represented by (a) the Existing IndebtednessNotes and the related Subsidiary Guarantees to be issued on the Issue Date and (b) the Exchange Notes and the Exchange Subsidiary Guarantees to be issued pursuant to this Indenture in exchange for the Notes and the Subsidiary Guarantees in accordance with the terms of the Registration Rights Agreement;
(3d) the incurrence by the Issuer and its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees;
(4) the incurrence by the Issuer 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, price or cost of construction or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Company or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsSubsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4d), not to exceed, exceed the greater of $175.0 million and 3.5% of Total Assets at any time outstanding, the greater of (x) $30.0 million or (y) 3% of Consolidated Tangible Assets of the Issuer;
(5e) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refundextend, refinance refinance, renew, replace, defease, or replace refund Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under the first paragraph of this Section 4.10(a) 4.07 or clauses (2b), (3c), (4d), (5l), (15m), (o), (z) or this clause (16e) of this Section 4.10(b)paragraph;
(6f) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of intercompany Indebtedness or the issuance of Disqualified Stock or Preferred Stock between or among the Issuer Company and any of its Restricted Subsidiaries; provided, however, that:
(a) if the Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness is owed to a Restricted Subsidiary that 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 Issuer, or the Note Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock being held by a Person other than the Issuer Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock to a Person that is not either the Issuer Company or a Restricted Subsidiary thereofSubsidiary, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock by the Issuer Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) the incurrence by the Issuer Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, fixing or hedging (i) interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding or swapping interest rate, commodity price or foreign currency (ii) exchange rate risk (with respect to obligations under any agreement or Indebtedness, or with respect to reverse any asset, of such Person that is payable or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time denominated in a currency other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunderU.S. Dollars;
(8) h) the Guarantee guarantee by the Issuer Company or any of the Restricted Subsidiary Subsidiaries of Indebtedness of the Issuer Company or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.164.07;
(9i) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock or preferred stock (including Disqualified Stock) in the form of additional shares of the same class of Disqualified Stock or preferred stock (including Disqualified Stock) will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock (including Disqualified Stock) for purposes of this Section 4.104.07; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer Company as accrued;
(10j) Indebtedness of the incurrence by the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if Company or 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 consisting of guarantees, indemnities, hold backs or obligations in respect of purchase price adjustments in connection with the Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer acquisition or any disposition of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of businessassets, including, without limitation, shares of Capital Stock of restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or disposition of assets which are contingent on the performance of the assets acquired or disposed of;
(k) Indebtedness represented by (i) letters of credit in respect for the account of the Company or any Restricted Subsidiary or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the extent that such letters of credit and other obligations, as the case may be, are intended to provide security for workers’ compensation claims or claims, payment obligations in connection with self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to participation in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (i) any subsequent issuance or transfer of any Equity Securities that results in such Disqualified Stock or preferred stock being held by a Person other than the Issuer or a Restricted Subsidiary thereof and (ii) any sale government reimbursement or other transfer of any such shares of Disqualified Stock programs or preferred stock to a Person that is not either the Issuer or a Restricted Subsidiary thereof shall be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock that was not permitted by this clause (13);
(14) the incurrence by the Issuer or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary other similar requirements in the ordinary course of business;
(15l) the incurrence by the Issuer Company or any Guarantor Restricted Subsidiary of Indebtedness to the extent the proceeds thereof are used to purchase Notes pursuant to a Change of Control Offer or defease or discharge the Notes in accordance with the terms of this Indenture;
(m) 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;
(n) Indebtedness incurred in the ordinary course of business in connection with cash pooling arrangements, cash management and other Indebtedness incurred in the ordinary course of business in respect of netting services, overdraft protections and similar arrangements in each case in connection with cash management and deposit accounts;
(o) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take or pay obligations in supply agreements, in each case in the ordinary course of business;
(p) Indebtedness of the Company and its Subsidiaries representing the obligation of such Person to make payments with respect to the cancellation or repurchase of Capital Stock of officers, employees or directors (or their estates) of the Company or such Subsidiaries pursuant to the terms of employment, severance or termination agreements, benefit plans or similar documents;
(q) Indebtedness incurred by a Securitization Subsidiary in connection with a Qualified Securitization Transaction that is non-recourse with respect to the Company and its Restricted Subsidiaries; provided, however, that in the event such Securitization Subsidiary ceases to qualify as a Securitization Subsidiary or such Indebtedness becomes recourse to the Company or any of its Restricted Subsidiaries, such Indebtedness will, in each case, be deemed to be, and must be classified by the Company as, incurred at such time (or at the time initially incurred) under one more of the other provisions of this Section 4.07;
(r) the disposition of accounts receivable in connection with receivables factoring arrangements in the ordinary course of business;
(s) unsecured Indebtedness in respect of obligations of the Company or any of its Restricted Subsidiaries to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligations) in the ordinary course of business;
(t) Indebtedness representing deferred compensation to employees of the Company or any of its Restricted Subsidiaries incurred in the ordinary course of business;
(u) reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts or similar instruments issued in the ordinary course of business, and Indebtedness of the Company in respect of letters of credit issued by the Company for its own account or for the account of any of its Restricted Subsidiaries;
(v) Indebtedness arising from any Sale and Leaseback Transaction; provided that the principal amount of any Indebtedness incurred pursuant to this clause may not exceed $50 million;
(w) Physician Support Obligations incurred by the Company or any Restricted Subsidiary;
(x) Indebtedness incurred on behalf of or representing Guarantees of Indebtedness of Permitted Joint Ventures of the Company or any Restricted Subsidiary not in excess of the greater of $50 million and 1.0% of Total Assets at any one time outstanding;
(y) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may include, but is not limited to, Indebtedness of the types referred to in the foregoing clauses (a) through (x) and clause (z)) 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 (15y), not to exceed the greater of $75.0 million;300 million and 6.0% of Total Assets; and
(16z) the incurrence by the Foreign Restricted Subsidiaries Indebtedness of the Issuer of Indebtedness in an aggregate principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Restricted Subsidiaries thereunder), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(1);
(18) the incurrence of Indebtedness (x) of the Issuer Company or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are a Restricted Subsidiary outstanding on the date on which such Restricted Subsidiary was acquired by the Issuer Company or any otherwise became a Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this IndentureSubsidiary; provided, provided that after giving effect thereto, (a) the Company would be permitted to any such transactionincur at least $1 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph of this Section 4.07, including the incurrence and/or repayment or retirement of any Indebtedness, (b) the Fixed Charge Coverage Ratio would be equal to or greater no worse than the Fixed Charge Coverage Ratio immediately prior thereto; provided, however, that up to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection $100 million in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value aggregate principal amount of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount Indebtedness may be incurred and outstanding at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant without regard to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of businessprevious proviso. For purposes of determining compliance with this Section 4.104.07, (x) in the event that any an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1a) through (22z) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.10(a)4.07, the Issuer Company will be permitted to classify and reclassify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time4.07. Indebtedness under Credit Facilities outstanding on the Credit Agreement date on date of this Indenture shall which Notes are first issued and authenticated hereunder will be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to in reliance on the exception provided by clause (1a) of paragraph the definition of “Permitted Debt”; and (by) at the time of incurrence, the Company will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs of this Section 4.10 shall be deemed for purposes 4.07 (or any portion thereof) without giving pro forma effect to the Indebtedness incurred on such date pursuant to the second paragraph of this Section 4.07 (or any portion thereof) when calculating the amount of Indebtedness that may be incurred pursuant to the first paragraph of this Section 4.07 (or any portion thereof). Notwithstanding any other provision of this Section 4.07, the maximum amount of Indebtedness that may be incurred pursuant to this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is will not be deemed to be borrowedexceeded with respect to any Indebtedness solely as a result of fluctuations in exchange rates or currency values. Guarantees of, repaid and reborrowed daily (or obligations in respect of letters of credit relating to, Indebtedness that is otherwise periodically)included in the determination of particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.07.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Issuer shall Parent will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Issuer Parent will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Issuer and the Restricted Subsidiaries Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Company and any Restricted Subsidiaries Subsidiary may incur Indebtedness (including Acquired Debt) and issue preferred stock, if the Fixed Charge Coverage Ratio for the IssuerParent’s most 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 issued, as the case may be, would have been at least 2.00 2.0 to 11.0, 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 or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, however, that the aggregate amount of Indebtedness or Disqualified Stock (including Acquired Debt) and preferred stock that the Parent’s non-Guarantor Restricted Subsidiaries (other than the Company) may be incurred incur under this paragraph by shall not exceed the greater of (x) $50.0 million and (y) 7.50% of Parent’s Consolidated Tangible Net Worth at any time outstanding; provided, further, that a change in GAAP that results in an obligation of the Parent or any of the Parent’s Restricted Subsidiaries that are exists at the time of such change, and is not Guarantors theretofore classified as Indebtedness, becoming Indebtedness shall not exceed $50.0 millionbe deemed an incurrence of such Indebtedness.
(b) The provisions of Section 4.10(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Issuer or any Guarantor of Indebtedness under Credit Facilities (Company and the incurrence by the Guarantors of Guarantees thereof) in an additional Indebtedness, including revolving credit Indebtedness, term loan Indebtedness and letters of credit, under one or more Credit Facilities, including, without limitation, the Credit Agreement, provided that immediately after giving pro forma affect to such incurrence (including pro forma application of the net proceeds therefrom), the aggregate principal amount at any one time incurred pursuant to this clause (1) and then outstanding (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and the Guarantors thereunder) shall not to exceed the greater of (x) $385.0 300.0 million and (y) 75.0% of the Borrowing Base; provided that in the event that the Company or a Guarantor enters into or increases commitments under a revolving credit facility or a deferred-draw term loan facility for which it elects to incur the Indebtedness under this clause (1), the amount of the Borrowing Base as of will be determined on the date such revolving credit facility or deferred-draw term loan facility is entered into or on the date of such incurrenceincrease in commitments (assuming that the full amount thereof has been borrowed as of such date), lessand, in if such test is satisfied with respect thereto at such time, any borrowing or reborrowing thereunder will be permitted irrespective of the case amount of both the Borrowing Base at the time of any borrowing or reborrowing (other than to the extent the Company or a Guarantor utilizes this clause (x1) and clause (yto incur other Indebtedness), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Issuer or any Guarantor to repay any Indebtedness under Credit Facilities (and, in the case of any revolving credit Indebtedness under a Credit Facility, to effect a corresponding commitment reduction thereunder) pursuant to Section 4.13 and less, in the case of both clause (x) and clause (y), amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Issuer Parent or any Guarantors of the its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Issuer Company and its Restricted Subsidiaries the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and related the Note Guarantees;
(4) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of Indebtedness represented by (including Acquired Debt, Capital Lease ObligationsObligations (other than Deemed Capitalized Leases), mortgage financings or purchase money obligations), Disqualified Stock and preferred stock, in each case, incurred for the purpose of financing all or any part of the purchase price, lease or cost of construction design, construction, installation or improvement, improvement of property (real or personal)property, plant or equipment used in the business of the Issuer Parent or any of its Restricted Subsidiaries, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), not to exceed, at any time outstanding, exceed the greater of (x) $30.0 50.0 million or and (y) 37.50% of Parent’s Consolidated Tangible Assets of the IssuerNet Worth;
(5) the incurrence by the Issuer Parent or any of the its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that is was permitted by this Indenture to be incurred under Section 4.10(a4.09(a) hereof or Sections 4.09(b)(2), 4.09(b)(3), 4.09(b)(5) or clauses 4.09(b)(16) hereof, including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (2including reasonable tender premiums), (3), (4), (5), (15) or (16) of this Section 4.10(b)defeasance costs and fees in connection therewith;
(6) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Issuer Parent and any of its Restricted Subsidiaries; provided, however, that:
(aA) if the Issuer Company or any Guarantor is the obligor on such Indebtedness, Indebtedness and such Indebtedness is owed to a Restricted Subsidiary that the payee is not the Company 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 the IssuerCompany, or the Note Guarantee, in the case of a Guarantor; and
(bB) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof of the Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Issuer Parent or a Restricted Subsidiary thereofof the Parent, shall will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Issuer Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence issuance by the Issuer or any of its the Parent’s Restricted Subsidiaries to the Parent or to any of the Parent’s Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;
(8) the Guarantee by the Issuer or any Restricted Subsidiary of Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer that was permitted to be incurred by another provision of this Section 4.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that is not a Guarantor, such Restricted Subsidiary complies with Section 4.16;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on 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 or preferred stock for purposes of this Section 4.10; provided, in each such case, that the amount thereof is included in Fixed Charges of the Issuer as accrued;
(10) the incurrence by the Issuer’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 Issuer that was not permitted by this clause (10);
(11) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness 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 other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurancestock; 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;
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Issuer 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 Issuer 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; provided that:
(a) such Indebtedness is not reflected on the balance sheet of the Issuer or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on that balance sheet for purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of those non-cash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by the Issuer and/or that Restricted Subsidiary in connection with that disposition;
(13) the issuance of Disqualified Stock or preferred stock by any of the Issuer’s Restricted Subsidiaries issued to the Issuer or another Restricted Subsidiary; provided that (iA) any subsequent issuance or transfer of any Equity Securities Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Issuer Parent or a Restricted Subsidiary thereof and of the Parent; and
(iiB) any sale or other transfer of any such shares of Disqualified Stock or preferred stock to a Person that is not either the Issuer Parent or a Restricted Subsidiary thereof shall of the Parent, will be deemed, in each case, to constitute an issuance of such shares of Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (137);
(14) 8) the incurrence by the Issuer Parent or any of its Restricted Subsidiaries of obligations in respect of performance and surety bonds and completion Guarantees provided by the Issuer or such Restricted Subsidiary Hedging Obligations in the ordinary course of business;
(9) the guarantee by the Parent or any of its Restricted Subsidiaries of Indebtedness of the Parent or a Restricted Subsidiary of the Parent to the extent that the guaranteed Indebtedness 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 or pari passu with the Notes, then the Guarantee must be subordinated in right of payment or pari passu, as applicable, to the same extent as the Indebtedness being guaranteed;
(10) the incurrence by the Parent or any of its Restricted Subsidiaries of obligations relating to net gas balancing positions;
(11) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, insurance premium finance agreements, self-insurance obligations, bankers’ acceptances, bid, appeal, performance and surety bonds or similar obligations or in respect of awards or judgments not resulting in an Event of Default;
(12) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days or arising in connection with endorsements of instruments for deposit;
(13) Indebtedness, other than in respect of borrowed money and incurred in the ordinary course of business (including customer deposits and advance payments received; take-or-pay obligations contained in supply arrangements; and open accounts extended by suppliers on normal trade terms in connection with purchases of goods and services which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of the Parent or a Restricted Subsidiary of the Parent);
(14) Indebtedness representing deferred compensation to employees of the Parent, the Company or any other Restricted Subsidiary of the Parent;
(15) the incurrence by the Issuer or any Guarantor of 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 (15), not to exceed $75.0 million;
(16) the incurrence by the Foreign Restricted Subsidiaries of the Issuer Parent of Indebtedness in an aggregate principal amount at any one time outstanding pursuant to this clause (with letters 15) not to exceed $15.0 million (or the equivalent thereof, measured at the time of credit being deemed to have a principal amount equal to each incurrence, in the maximum potential liability of the Restricted Subsidiaries thereunderapplicable foreign currency), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16), not to exceed $50.0 million;
(17) the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Issuer or any other Restricted Subsidiary of the Issuer (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; provided, that, the aggregate amount of Indebtedness under this clause (17), when aggregated with all Indebtedness outstanding under Section 4.10(b)(1), shall not exceed the maximum amount permitted under Section 4.10(b)(14.09(b)(15);
(18) the incurrence of Indebtedness (x) of the Issuer or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or Restricted Subsidiary in accordance with the terms of this Indenture; provided, that after giving effect to any such transaction, including the incurrence and/or repayment or retirement of any Indebtedness, the Fixed Charge Coverage Ratio would be equal to or greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;
(19) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(20) the incurrence by the Issuer of Indebtedness to effect the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer or any Parent, in each case held by any former or current employees, officers, directors or consultants of the Issuer or any of its Restricted Subsidiaries or their respective estates, spouses, former spouses or family members under any management equity plan or stock option or other management or employee benefit plan upon the death, disability or termination of employment of such Persons in an aggregate amount at any one time outstanding not to exceed the maximum amount of such acquisitions pursuant to Section 4.11(b)(5);
(21) the incurrence of Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit; and
(22) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business. For purposes of determining compliance with this Section 4.10, in the event that any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (22) above, or is entitled to be incurred pursuant to Section 4.10(a), the Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, and from time to time may reclassify, in any manner that complies with this Section 4.10 at such time. Indebtedness under the Credit Agreement on date of this Indenture shall be deemed to have been incurred on such date pursuant to Section 4.10(b)(1). Any Indebtedness incurred under Credit Facilities pursuant to clause (1) of paragraph (b) of this Section 4.10 shall be deemed for purposes of this covenant to have been incurred on the date such Indebtedness was first incurred until such Indebtedness is actually repaid, notwithstanding any provisions under any Credit Facility that provide that such Indebtedness is deemed to be borrowed, repaid and reborrowed daily (or otherwise periodically).
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Sources: Indenture (Forestar Group Inc.)