Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) Section 4.09(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 Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence; (2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance; (5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b); (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that: (A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations; (9) the Guarantee by the Company 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 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 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; (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 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; and (15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and (2) the amount of the Indebtedness 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 Company will not, and 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 Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Company and its Restricted Subsidiaries thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.0% such amount as would not cause the Consolidated Senior Secured Leverage Ratio, calculated as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence, to exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company 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 and could have been incurred (in compliance with this Section 4.09; provided that if ) by 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 guaranteedPerson so Guaranteeing such Indebtedness;
(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 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;
(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 (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(1211) 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 of in-kind obligations relating to net oil or natural gas balancing positions arising 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;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary 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) any Permitted Acquisition 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; and, 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 additional 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 or and/or the issuance guarantee by the Company and/or any of any Disqualified Stock 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1517), not to exceed the greater of (ia) $75.0 300.0 million and (iib) 5.04.0% of the Company’s Adjusted Consolidated Net Tangible 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 issuance(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 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 (1527) 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, incurrence (or later redivide reclassify such Indebtedness in whole or reclassify all or a portion of such item of Indebtedness, in part) in any manner that complies with this Section 4.09. Indebtedness under In addition, the Credit Agreement 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be treated as 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.incu
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 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 Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Debt to Cash Flow 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 no greater than 6.0 to 1.01, 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.
(b) The provisions of Section 4.09(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”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuers Company and the Guarantors, any Subsidiary Guarantor of (A) additional Indebtedness and letters of credit under Credit Facilities in an Facilities, provided that giving effect to such incurrence, the aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its 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 (ix) $700.0 million 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness or debt securities under Credit Facilities or to repay any revolving credit Indebtedness under Credit Facilities and effect a corresponding commitment reduction thereunder, in each case pursuant to Section 4.10 hereof and (iiy) $175.0 million plus 35.0300% of the Company’s Adjusted Consolidated Net Tangible Assets determined 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 date 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 incurrenceadditional Indebtedness is permitted pursuant to any of the other provisions of this Section 4.09;
(2) the incurrence by the Company and its Restricted Subsidiaries of the any Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or cost of design, construction, installation or improvement of property, plant or equipment or the Capital Stock of any Person owning such assets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount 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 (4), not to exceed the greater of (i) $45.0 million and (ii) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as Total Assets, at the time of the date of any such incurrence or issuancepursuant to this clause (4);
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this the Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15) or (1524) of this Section 4.09(b)paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Subsidiary 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the Company, or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 CompanyCompany 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations (other than for speculative purposes);
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors 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 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 obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or bid, plugging and abandonment, appeal, reimbursement, performance, surety and injunctive relief bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations in the ordinary course of business 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 businessforegoing;
(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 inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business DaysDays 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;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness in respect of letters of credit required to net oil or natural gas balancing positions arising be issued in the ordinary course of businessconnection with any Permitted Joint Venture Investment;
(13) any obligation arising from agreements of the incurrence by the Company or any of its Restricted Subsidiary 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 providing for indemnification, adjustment Company’s Total Assets at the time 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 Subsidiaryincurrence;
(14) the incurrence by the Company or any Permitted Acquisition of its Restricted Subsidiaries of Contribution Indebtedness; and;
(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 issuance 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 Disqualified Stock 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, upon the drawing of 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 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, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1519), not to exceed the greater of (ix) $100.0 million and (y) 1.0% 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; and
(24) 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 (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, replace, defease or discharge any Indebtedness incurred pursuant to this clause (24), does not exceed the greater of (x) $75.0 million and (iiy) 5.00.75% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as at the time of such incurrence. 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 date 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 incurrence Indebtedness being unsecured or issuanceby 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 (1524) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify all or a portion of such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 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 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 Credit Agreement outstanding on the date on which Notes are first issued and authenticated under case may be, shall not be deemed, for purposes of this Indenture will initially calculation, to be deemed to have been incurred on an incurrence at such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtsubsequent time. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.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 Company will not, and will not permit Neither AREP nor any of its Restricted Subsidiaries to, directly or indirectly, Guarantor shall 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 Company will not neither AREP nor any Guarantor shall issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers AREP or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and if immediately after giving effect to the Guarantors may incur incurrence of additional Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 issuance of Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional ratio of the aggregate principal amount of all outstanding Indebtedness had (excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section 4.09(b) and any Hedging Obligations of AREP's Subsidiaries that are not 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 AREP 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 incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter periodless than 1.75 to 1.
(b) The provisions of Section 4.09(a) will shall 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 Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at AREP or any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesExchange Notes to be issued pursuant to the Registration Rights Agreement;
(42) the incurrence by the Company 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 design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (21), (3), (4), (5), (142) or (159) of this Section 4.09(b)) or any Existing Indebtedness;
(63) the incurrence by the Company AREP or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Company AREP and any of its Restricted Subsidiaries; provided, however, that:
Subsidiaries (Aincluding AREH) if or the Company or issuance of Disqualified Stock by any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)AREP;
(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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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;
(104) the incurrence by the Company AREP 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 Hedging Obligations that are incurred 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 normal course of business;
(115) the incurrence by the Company AREP or any of its Restricted Subsidiaries 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;
(126) the incurrence by the Company AREP or any Guarantor of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businessExisting Indebtedness;
(137) any obligation Indebtedness arising from agreements of the Company any agreement entered into by AREP or any Restricted Subsidiary of the Company AREH providing for indemnification, purchase price 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 Subsidiaryan asset sale;
(14) 8) Indebtedness of AREP or any Permitted Acquisition IndebtednessGuarantor attributable to Bad Boy Guarantees; and
(159) the incurrence by the Company AREP or any of its Restricted Subsidiaries Guarantor 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (159), not to exceed $10.0 million at any one time outstanding. Neither AREP nor any Guarantor shall incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of AREP or any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the greater 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 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 lesser extent or on a junior Lien basis.
(i) $75.0 million 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) 5.0% any sale or other transfer of the Company’s Adjusted Consolidated Net Tangible Assets determined as any such Indebtedness to a Person that is not either AREP or a Subsidiary of the date AREP (including any Guarantor) shall be deemed, in each case, to constitute an incurrence of such incurrence Indebtedness by AREP or issuanceany 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 obligations in connection with such intercompany Indebtedness shall be required by such subordinated terms except during the occurrence and continuation of a Default or Event of Default. 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 (159) above, above or is entitled to be incurred pursuant to Section 4.09(a), in each case, as of the Company will be permitted to dividedate of incurrence thereof, AREP shall, in its sole discretion, classify and (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.09 and such Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have treated as having been incurred on pursuant to such date in reliance on clauses or Section 4.09(a), as the exception provided case may be, designated by clause (1) of the definition of Permitted DebtAREP. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages 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 preferred 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 shares of the same class of Preferred Stock or Disqualified Stock will shall 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 . Notwithstanding any other provision of Section 4.09, the maximum amount of Indebtedness that the amount thereof AREP or any Guarantor may incur pursuant to Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will shall be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock, and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and issue preferred stock, (x) for so long as any Class D Preferred StockUnits 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 Company’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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such fourTrailing Four Quarter Period; provided, further, that the aggregate principal amount of Indebtedness of non-quarter periodGuarantor Subsidiaries outstanding pursuant to this Section 4.09(a) shall not exceed $50.0 million.
(b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stockpreferred stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities (including the ABL Facility, the Term Loan Facility and the Notes and the related Note Guarantees issued 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 Company and 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 (ix) $700.0 600.0 million and (iiy) the amount of the Borrowing Base 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) $175.0 million plus 35.02.95 billion and (y) 40% of the Total Assets of the Company’s Adjusted Consolidated Net Tangible Assets determined on , plus (B) at the date time of such incurrence;, an amount equal to the maximum principal amount that could be incurred such that after giving pro forma effect thereto, the First Lien Leverage Ratio would be no greater than 4.50 to 1.00; provided that for purposes of determining the amount that may be incurred under clause (1)(II)(B), all unsecured Indebtedness and Junior Lien Indebtedness incurred under this clause (1) shall be deemed to be included in clause (i) of the definition of “First Lien Leverage Ratio”.
(2) the incurrence by the Company and or its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and Class D Preferred Units;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to extend, retire, redeem, repay, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4)3) at any time; 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 to exceed the greater of (ia) $45.0 200.0 million and (iib) 3.03.75% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceCompany;
(54) 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 extend, redeem, repay, renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of any Restricted Subsidiary, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses clause (2), (3), (4), (5), (14) or (1511) of this Section 4.09(b) or this clause (4);
(65) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either neither the Company or nor a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (76);
(8) 7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) 8) the Guarantee by the Company 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 NotesNotes or the applicable Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed;
(9) the incurrence by the Company or any Restricted Subsidiary of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with 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 to letters of credit functioning as or supporting any credit; provided that, upon the drawing of the foregoing bonds or such letters of credit, such obligations and workers’ compensation claims in the ordinary course of businessare reimbursed within 30 days following such drawing;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness arising from of any Unrestricted Subsidiary or any Joint Venture but only to the honoring by extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a bank general partner or other financial institution member of, or owner of a checkan Equity Interest in, draft such Unrestricted Subsidiary or similar instrument inadvertently drawn against insufficient fundsJoint Venture and not as guarantor of such Indebtedness; provided that, so long as immediately after giving effect to any such incurrence, the principal amount of all Indebtedness is covered within five Business Daysincurred pursuant to this clause (11) and then outstanding does not exceed $50.0 million;
(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; and
(1513) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or and the issuance by the Company of any Disqualified Stock, provided that, immediately after giving effect to any such incurrence or issuance, the amount of all such Indebtedness and 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 (1513) 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 to exceed the greater of (ia) $75.0 150.0 million and (iib) 5.03.00% of the Company’s Adjusted Consolidated Net Tangible Total Assets of the Company determined as of on the date of such incurrence incurrence.
(c) Subject to Section 4.09(d) below, 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 issuancesuch 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 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 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 (1513) aboveof Section 4.09(b) hereof, 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.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 Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, provided that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, preferred stock if the Fixed Charge Consolidated Coverage Ratio for the Company’s '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, as the case may be, issued would have been at least 2.25 2 to 1.01, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall 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”"):
(1i) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness and letters of credit or Disqualified Stock under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause not to exceed the greater of (1a) $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 Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and 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 Company or a Restricted Subsidiary of Indebtedness or Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in 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 amount (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 (iv) does not exceed $30.0 million;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (14xv) or (15xvi) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the 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 Company or a Restricted Subsidiary of the Company thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries Guarantor of Hedging ObligationsObligations 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;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Guarantor 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 guaranteedcovenant;
(10ix) 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 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;
(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 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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15ix), not to exceed $20.0 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 greater 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 (iix));
(x) $75.0 million and (ii) 5.0Non-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 Company’s Adjusted Consolidated Net Tangible Assets determined estimated cost of the assets so acquired, developed or improved;
(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 $10.0 million;
(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 obligation to repay any obligation relating to borrowed money), all in the ordinary course of business;
(xiii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another 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 Company or another Restricted Subsidiary) shall be deemed, in each case 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 Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that 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 (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 pursuant to Construction Loans existing as of the date Issue Date up to the limits of such incurrence or issuanceConstruction Loan existing on the Issue Date. 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 (1i) through (15xvi) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify (and reclassify later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence 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 this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, discount or 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 terms 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 provided, in each such case, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Facilities on the Issue Date shall be included in Fixed Charges deemed to have been incurred under clause (i) of the Company as accrued to the extent required by the definition second paragraph 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 of determination; and
(2) the amount of the Indebtedness of the other Personthis Section 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 Company will not, and 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 Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Company and its Restricted Subsidiaries thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.0% such amount as would not cause the Consolidated Senior Secured Leverage Ratio, calculated as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence, to exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company 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 and could have been incurred (in compliance with this Section 4.09; provided that if ) by 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 guaranteedPerson so Guaranteeing such Indebtedness;
(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 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;
(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 (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(1211) 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 of in-kind obligations relating to net oil or natural gas balancing positions arising 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;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary 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) any Permitted Acquisition 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; and, 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 additional 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 or and/or the issuance guarantee by the Company and/or any of any Disqualified Stock 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1517), not to exceed the greater of (ia) $75.0 275.0 million and (iib) 5.03.0% of the Company’s Adjusted Consolidated Net Tangible 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 issuance(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 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 (1527) 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, incurrence (or later redivide reclassify such Indebtedness in whole or reclassify all or a portion of such item of Indebtedness, in part) in any manner that complies with this Section 4.09. Indebtedness under In addition, the Credit Agreement 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be treated as 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.Inde
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and 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 Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Issuer and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the CompanyIssuer’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, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 or the Disqualified Stock or the 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.
(b) Section 4.09(a4.10(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 existence of Indebtedness under the Credit Agreement together with the incurrence by of the Issuers guarantees thereunder and the Guarantors, issuance and creation of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) 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 $1,550.0 million outstanding at any one time, less the Company amount of all mandatory principal payments (with respect to revolving borrowings and its Restricted Subsidiaries thereunderletters of credit, only to the extent revolving commitments are correspondingly reduced) not to exceed actually made by the greater borrower thereunder in respect of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Indebtedness thereunder with Net Tangible Assets determined on the date of such incurrenceProceeds from Asset Sales;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes to be Securities (including any Guarantee) issued on the date Issue Date;
(3) Existing Indebtedness (other than Indebtedness described in clauses (1) and (2) of this Indenture and the related Note GuaranteesSection 4.10(b));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease ObligationsSubsidiary to finance the purchase, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment that is used or useful in a Permitted Business (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstandingthat, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness then outstanding and incurred pursuant to this clause (4), does not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Subsidiary constituting reimbursement obligations with respect to the Notes, in the case of the 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-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;
(116) 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 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 Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition 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 (A) such Indebtedness is not reflected on the balance sheet of the Issuer 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 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 any Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) 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 Preferred Stock;
(9) Hedging Obligations of the 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 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 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 Securities or the Guarantee of such 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;
(13) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness 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 any Indebtedness issued to so refund or refinance such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a 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 refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Securities, such Refinancing Indebtedness is subordinated or pari passu to the Securities 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 a Guarantor that refinances Indebtedness or Preferred Stock of the Issuer or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D) shall not be in a transaction permitted 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 the Stated Maturity of the Indebtedness being refunded or refinanced; and provided, further, that subclauses (A), (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 obligation Indebtedness or Preferred Stock is not reflected as a liability on incurred in connection with or in contemplation of such acquisition or merger; and provided, further, that after giving effect to such incurrence of Indebtedness either (A) the face Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the balance sheet of Coverage Ratio Exception or (B) the Company or any Restricted SubsidiaryFixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(14) any Permitted Acquisition Indebtedness; and
(15) Indebtedness arising from the honoring by a bank or financial institution of a check, draft or 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;
(16) 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 by of (A) Non-Recourse Acquisition Financing Indebtedness and (B) Non-Recourse Product Financing Indebtedness;
(19) Contribution Indebtedness;
(20) (a) if the Company or any of its Restricted Subsidiaries 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 issuance by Issuer could not incur $1.00 of additional Indebtedness pursuant to the Company Coverage Ratio Exception hereof after giving effect to such borrowing, Indebtedness of any Disqualified Stock in an Foreign Subsidiaries of the Issuer incurred for working capital purposes, provided, however, that the aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing of Indebtedness incurred to renewunder this clause (20) which, refund, refinance, replace, defease or discharge any when aggregated with the principal amount of all other Indebtedness then outstanding and incurred or Disqualified Stock issued pursuant to this clause (1520), does not to exceed the greater of (ix) $75.0 100.0 million and (iiy) 5.010% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date Foreign Subsidiaries; and
(21) Indebtedness consisting of such incurrence promissory notes issued by the Issuer or issuance. 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 Equity Interests of Holdco permitted by Section 4.11.
(c) For purposes of determining compliance with this Section 4.094.10, 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 (1521) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company Issuer will be permitted to divide, classify and later reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant, and such item 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 on which Notes Securities 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” in Section 4.10(b) and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness. The accrual maximum amount of interest or Preferred Stock or Disqualified Stock dividends or distributions, Indebtedness that 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 Issuer and its Restricted Subsidiaries may incur pursuant 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 this covenant shall 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 shall be included in Fixed Charges of the Company as accrued exceeded, with respect to 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, solely as a result of fluctuations in the case exchange rate 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 of determination; and
(2) the amount of the Indebtedness of the other Personcurrencies.
Appears in 2 contracts
Sources: Indenture (Warner Alliance Music Inc), Indenture (LEM America, Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available applicable Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter periodReference Period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Debt Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its the Restricted Subsidiaries thereunder) not to exceed the greater greatest of (ia) $700.0 million and 2,000.0 million, (iib) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets and (c) the Borrowing Base as of the date of incurrence of such Indebtedness determined on as of the date of such incurrenceincurrence and after giving effect to the use of proceeds thereof; provided that any Indebtedness and letters of credit incurred pursuant to this clause (1) may be exchanged, renewed, refunded, refinanced, replaced, defeased or discharged if the principal amount (or accreted value, if applicable) of such new Indebtedness and letters of credit does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, exchanged, renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest and the amount of all fees and expenses, including premiums, incurred in connection therewith);
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and 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 GuaranteesIssue Date;
(4) the incurrence by the Company 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, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 175.0 million and (iib) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceand after giving effect to the use of proceeds thereof;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, 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 was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (1413) or (15) ), of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not 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 Company, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, in each case of clause (a) or clause (b), will be deemed, in each case, deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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:
(Aa) 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
(Bb) 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, 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 Company or any of its Restricted Subsidiaries of Hedging Obligations[reserved];
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to the Notes or pari passu with the Notesa Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, 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 by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance 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) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil oil, natural gas liquid 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, contribution, adjustment of purchase price, earn 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 a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted SubsidiarySubsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(14) any Permitted Acquisition Indebtedness; and
(1516) 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 (1516), not to exceed the greater of (ia) $75.0 500.0 million and (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceissuance and after giving effect to the use of proceeds thereof; and
(17) the incurrence of additional Indebtedness by Restricted Subsidiaries that are not Guarantors and Indebtedness incurred by the Company or any Restricted Subsidiary on behalf of, or representing guarantees of Indebtedness of, Joint Ventures of the Company and any Restricted Subsidiary 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 the greater of (a) $125.0 million and (b) 3.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance and after giving effect to the use of proceeds thereof. The Company will not incur, and the Company 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 (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 greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. 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 (1Section 4.09(b)(1) through (1517) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Senior Credit Agreement Facility outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder 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 DebtDebt and may not later be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, 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, 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 not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (Chord Energy Corp), Indenture (Chord Energy Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company nor any Guarantor (other than Parent) will not issue any Disqualified Stock and the Company will not permit any of its other Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Guarantor (other than Parent) may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, or any Guarantor of additional Indebtedness and (including letters of credit credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (ia) $700.0 million 400.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay revolving credit Indebtedness under the Credit Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (iib) $175.0 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and the any Exchange Notes and related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, 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, 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 Guarantee of the Company, or the Note Guarantee, in the case of a such Guarantor; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent any Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to or pari passu net gas balancing positions arising in the ordinary course of business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(10) the incurrence by the Company or any of its Restricted Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event will be deemed to constitute an incurrence of Indebtedness 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 businessthat is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from indebtedness in respect of bid, performance, surety and similar bonds issued for the honoring by a bank or 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 financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthan 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 in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements agreement of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price 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; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(1514) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance25.0 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 (1514) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. 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 under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Company and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
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 Company will shall not, and will 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock and any Foreign Subsidiary may incur Indebtedness, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or Preferred Stock, as applicable set forth below (collectively, “Permitted Debt”):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderi) not to exceed an amount equal to (x) $760.0 million, plus (y) an amount not in excess of (i) the greater of (ix) $700.0 500.0 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) $175.0 million plus 35.0% the aggregate principal amount of all Indebtedness previously incurred pursuant to this subclause (y), less the Company’s Adjusted Consolidated aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales applied by the date of such incurrenceCompany or any Restricted Subsidiary to repay any Indebtedness under the Credit Agreement and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto, pursuant to Section 4.10;
(2ii) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Existing Indebtedness;
(3iii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and the related Note Guaranteesany Guarantees thereof by any Guarantor;
(4iv) the incurrence by the 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 or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets, at any time outstanding;
(5v) the incurrence by the Company or any of its the Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2ii), (3), (4), (5), (14iii) or (15v) of this Section 4.09(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A1) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 Company, 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations that are incurred for the purpose of fixing, hedging or swapping 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 the Company’s financial management and not for any speculative purpose;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary 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;
(10ix) 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 Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(x) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, including Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiaries of Indebtedness Subsidiary, incurred in respect of workers’ compensation claims, self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementobligations, performance, proposal, completion, surety and similar bonds and completion guarantees provided by the Company or a any Restricted Subsidiary in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any business; provided that the underlying obligation to perform is that of the foregoing bonds Company or obligations the Restricted Subsidiaries and workers’ compensation claims not that of the Company’s Unrestricted Subsidiaries; provided, further, that such underlying obligation is not in the ordinary course respect of businessborrowed money;
(11xi) 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 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; and
(15) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xi), not to exceed $125.0 million;
(xii) the incurrence by the Company or any Restricted Subsidiary 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;
(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 constitute an issuance of preferred stock not permitted by this clause (xiv);
(xv) the incurrence of Acquired Debt (but not any Indebtedness incurred in connection with, or in contemplation of such other Person merging with or into, or becoming a Subsidiary of, the Company); provided, however, that on the date such Person becomes a Subsidiary or is acquired by the Company and after giving pro forma effect thereto, (x) the Company would have been entitled to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in Section 4.09(a) or (y) the Fixed Charge Coverage Ratio would be greater than such ratio for the Company and the Restricted Subsidiaries immediately prior to such transaction;
(xvi) Guarantees by the Company or any Restricted Subsidiary of Indebtedness of any Unrestricted Subsidiary, provided that the aggregate principal amount of such Guarantees of Indebtedness of any Unrestricted Subsidiary shall not exceed the greater of (i) $75.0 million and (ii) 5.02.5% of Consolidated Tangible Assets, at any time outstanding; and
(xvii) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction.
(c) For purposes of determining compliance with any restriction on the Company’s Adjusted Consolidated Net Tangible Assets incurrence of Indebtedness where the Indebtedness incurred is not denominated in U.S. dollars, the amount of such Indebtedness will be the U.S. Dollar Equivalent determined as of on the date of incurrence of such incurrence or issuanceIndebtedness; provided, 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.
(d) 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 (1i) through (15xvii) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will shall 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 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 this Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause in Section 4.09(b)(i) hereof.
(1e) 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 definition Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of Permitted Debt. The accrual of interest payment to the Notes or Preferred Stock or Disqualified Stock dividends or distributionssuch Note Guarantee on substantially identical terms; provided, the accretion or amortization of original issue discounthowever, the payment of interest on any that no 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 Company or Disqualified Stock any Guarantor will not be deemed to be an incurrence contractually subordinated in right of payment to any other Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to or any Guarantor solely by virtue of being unsecured or by virtue of the extent required by fact that the definition holders of secured Indebtedness have entered into intercreditor arrangements giving one or more of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) holders priority over the accreted value of the Indebtedness, other holders 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 collateral held 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 Personthem.
Appears in 2 contracts
Sources: Indenture (Geo Group Inc), Indenture (Geo Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuers shall not, and will 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 Company will Issuers shall not issue any Disqualified Stock and will shall not permit any of its their Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, Stock or preferred stock if (i) no Default or Event of Default shall have occurred and be continuing at the Guarantors may incur time of or as consequence of the incurrence of any such Indebtedness or the issuance of any such Disqualified Stock and (including Acquired Debtii) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s '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, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred 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.
(b) . The provisions of the first paragraph of this Section 4.09(a) will 4.9 shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers Company (and the guarantee thereof by the Guarantors, ) of Indebtedness and letters of credit under one or more Senior Credit Facilities in an Facilities; provided that the aggregate principal amount at any one time outstanding under this clause (1) of all Indebtedness (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries 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) $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) $700.0 million of the third paragraph of the covenant described in Section 4.10 hereof and (y) the Company's Borrowing Base;
(ii) the incurrence by the Issuers of Indebtedness represented by the Notes and the Guarantees thereof by the Guarantors in an aggregate principal amount of $175.0 110.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined outstanding on the date of such incurrencethis Indenture;
(2iii) 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 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 Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of other Indebtedness represented by the Notes to be issued outstanding on the date of this Indenture and the related Note Guaranteesfor so long as such Indebtedness remains outstanding;
(4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital (including Capitalized Lease Obligations) to finance the purchase, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment used in (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), outstanding not to exceed the greater of (ix) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2y), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
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 Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, preferred stock if the Fixed Charge Consolidated 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2 to 1.01, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall 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”):
(1i) the incurrence by the Issuers Company and the Guarantors, Guarantors of Indebtedness and letters of credit or Disqualified Stock under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause not to exceed the greater of (1a) $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 Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and 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 the related Note GuaranteesIndenture;
(4iv) the incurrence by the Company or a Restricted Subsidiary of Indebtedness or Disqualified Stock (1) in connection with the acquisition of assets or a new Subsidiary or (2) to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets); provided that, in 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 amount (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 (iv) does not exceed the greater of (x) $75.0 million or (y) 2.5% of Total Assets;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5ix), (14xv), (xvi), (xvii), (xviii) or (15xix) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, provided that:
: (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
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 Company or a Restricted Subsidiary of the Company thereof, and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries Guarantor of Hedging ObligationsObligations 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;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Guarantor 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 guaranteedcovenant;
(10ix) 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 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;
(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 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; and
(15) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15ix), not to exceed $50.0 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 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));
(x) 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 (ix) $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 obligation to repay any obligation relating to borrowed money), all in the ordinary course of business;
(xiii) shares of preferred stock of a Restricted Subsidiary issued to the Company or another 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 Company or another Restricted Subsidiary) shall be deemed, in each case 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 Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that 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 (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 (iiB)(1) 5.0at 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 pursuant to Construction Loans existing as of the Issue Date up to the limits of such 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 kind through the accretion of such interest or the issuance of additional Second Lien Notes);
(xviii) 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 Company’s Adjusted Consolidated Net Tangible Assets determined as Existing Notes (and any interest paid-in kind through the accretion of such interest or the issuance of additional notes); and
(xix) the incurrence by the Company and the Restricted Subsidiaries of unsecured Indebtedness to be exchanged for certain of the date Company’s Existing Notes (and any interest paid-in kind through the accretion of such incurrence interest or issuancethe issuance of additional notes). 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 (1i) through (15xix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, classify (and reclassify later reclassify) in whole or in part such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, incurrence 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 this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, the accretion or amortization of original issue discount, discount or 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 terms 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 provided, in each such case, that the amount thereof is included in Consolidated Interest Incurred of the Company. Indebtedness outstanding and not repaid under the Credit Facilities on the Issue Date shall be included in Fixed Charges deemed to have been incurred under clause (i) of the Company as accrued to the extent required by the definition second paragraph 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 of determination; and
(2) the amount of the Indebtedness of the other Personthis Section 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, provided that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 3.00 to 1.01.00, 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 preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers and Company or any Restricted Subsidiary of the Guarantors, Company of additional Indebtedness and letters of credit under the Senior Credit Facilities 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 (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (iia) $175.0 million (plus 35.0% up to an additional $15.0 million in respect of additional principal (including overadvances) under the Senior Credit Facility, as in effect on the Issue Date), less (b) the sum of (x) the aggregate amount of all repayments, optional or mandatory, of the Company’s Adjusted Consolidated 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 Tangible Assets determined on Proceeds of Asset Sales pursuant to Section 4.10(b)(l)(a) hereof and (y) the date aggregate amount of such incurrenceall 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 pursuant to Section 4.10(b)(1)(a) hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness, including without limitation any 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 Issuers Company and 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 the related Note Guarantees(ii);
(4) 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 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 or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, or Attributable Debt relating to a sale leaseback transaction, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 7.5 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or ), (15) and (18) of this Section 4.09(bparagraph (b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 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 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 with respect to commercial letters of credit functioning as or supporting any of the foregoing credit, bankers’ acceptances and performance and surety bonds or obligations and workers’ compensation claims 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;
(1213) endorsements of instruments or other items of deposit;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness owed to net oil any current or natural gas balancing positions arising former officer, director or employee of the Company or any of its Restricted Subsidiaries in connection with the ordinary course repurchase, redemption or other acquisition or retirement of businessEquity 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;
(1315) any obligation arising from agreements 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 of or merged into 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 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 transaction permitted Restricted Subsidiary of or was otherwise acquired by this Indentureor merged into the Company or such Restricted Subsidiary); provided that after giving effect to such obligation 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 reflected as a liability on to exceed $12.5 million;
(16) the face incurrence by Foreign Restricted Subsidiaries of the balance sheet 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 SubsidiarySubsidiaries 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;
(1417) any Permitted Acquisition Indebtedness; and[reserved];
(1518) 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 (1518), not to exceed $10.0 million; and
(19) the greater incurrence by the Company and the Guarantors of Indebtedness represented by (i) Additional Notes in an aggregate principal amount not to exceed $75.0 million 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) 5.0% 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’s Adjusted Consolidated Net Tangible Assets determined as 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 date Company solely by virtue of such incurrence being unsecured or issuance. 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 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 (1519) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Senior Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture Facility 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 or Preferred Stock or Disqualified Stock dividends or distributionspremium, 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 preferred 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued 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 the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such term. fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the 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 Company will not, and 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 Company nor any Restricted Subsidiary will not issue any Disqualified Stock and the Company will not permit any of its other Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, or any Restricted Subsidiary of additional Indebtedness and (including letters of credit credit) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (ia) $700.0 million 925.0 million, less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay revolving credit Indebtedness under the Credit Facilities and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (iib) $175.0 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness 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 Guarantees issued in exchange therefor pursuant to the related Note GuaranteesRegistration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 20.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness Indebtedness, Disqualified Stock or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, 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, 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 Guarantee of the Company, or the Note Guarantee, in the case of a such Guarantor; and
(B) 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 Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or preferred stock by the 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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent any Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to or pari passu net gas balancing positions arising in the ordinary course of business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(10) the incurrence by the Company or any of its Restricted Unrestricted Subsidiaries of Non-Recourse Debt of an Unrestricted Subsidiary provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event will be deemed to constitute an incurrence of Indebtedness 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 businessthat is not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from in respect of bid, performance, surety and similar bonds issued for the honoring by a bank or 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 financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthan 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 in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business;
(13) any obligation Indebtedness arising from agreements of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price 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; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted SubsidiarySubsidiaries in connection with such disposition;
(14) any Permitted Acquisition Indebtedness; and
(15) 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 (15), not to exceed $50.0 million; and
(15) Indebtedness to the greater of (i) $75.0 million and (ii) 5.0% of extent the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceproceeds 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) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. 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 under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Company and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, PROVIDED that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Mirror Note Issuers and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed ; PROVIDED FURTHER that a Restricted Subsidiary may issue preferred stock to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Company, will be deemed, or in each case, to constitute an incurrence a transaction or series of such Indebtedness by the Company or related transactions consisting of a sale of such Restricted Subsidiary; PROVIDED that immediately after giving effect to such sale, 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 neither the Company or to nor any of its Restricted Subsidiaries of owns 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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 portion of such item of Indebtedness, in any manner that sale complies with this Section 4.09. Indebtedness under the Credit Agreement 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person4.10.
Appears in 2 contracts
Sources: Indenture (Paramount Resources LTD), Indenture (Paramount Resources LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Issuer and the Guarantors may incur Indebtedness (including including, without limitation, Acquired DebtIndebtedness) or issue Preferred Stock and any Restricted Subsidiary may incur Acquired Indebtedness if on the date of the incurrence of such Indebtedness or the issuance of such Preferred Stock, if after giving effect to the Fixed Charge Coverage incurrence or issuance thereof, the Consolidated 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 or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)Company would be less than 4.5 to 1.0 if such incurrence is on or prior to December 23, as 2006, and less than 4.0 to 1.0 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 periodincurrence is after such date.
(b) Section 4.09(a4.10(a) will shall not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or any of the following items of Preferred Stock, as applicable (collectively, “Permitted DebtIndebtedness”):
(1) the incurrence by the Issuers and the Guarantors, Company of Indebtedness under the Securities issued on the Issue Date and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause Guarantees thereof;
(12) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability other Indebtedness of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined outstanding on the date of such incurrence;
(2) Issue Date after giving effect to the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessRestructuring;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business Interest Swap Obligations of the Company or any covering Indebtedness of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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:that 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 exceed the principal amount of the Indebtedness to which such Interest Swap Obligations relate;
(A4) any subsequent issuance Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company outstanding, other than as a result of fluctuations in foreign currency exchange rates or transfer by reason of Equity Interests that results 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 any such Preferred Stock being each case subject to no Lien held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer provided that if as of any such Preferred Stock to a date any Person that is not either other than the Company or a Restricted Subsidiary of the Company, will be deemed, owns or holds any such Indebtedness or holds a Lien in each case, to constitute an issuance respect of such Preferred Stock Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Restricted Subsidiary that was not permitted by this clause (7)Indebtedness;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(96) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or 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 the extent that the guaranteed Indebtedness was permitted any Restricted Subsidiary is unsecured and subordinated, pursuant 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 applicablea written agreement, to the same extent 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 guaranteednot constituting Permitted Indebtedness by the Company;
(107) 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 and any Guarantees or letters of credit functioning as or supporting any arising out of the foregoing bonds or obligations and workers’ compensation claims Intercompany Agreements, to the extent such Indebtedness is incurred in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of 8) 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 fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays after incurrence;
(129) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries in respect of inperformance bonds, bankers’ acceptances, workers’ compensation claims, bid, surety or appeal bonds, payment obligations in connection with self-kind obligations relating to net oil insurance, insurance premiums or natural gas balancing positions arising similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(1310) Indebtedness represented by Purchase Money Indebtedness and Capitalized Lease Obligations not to exceed £25.0 million at any obligation one time outstanding;
(11) Indebtedness of the Company, the Issuer or any Restricted Subsidiary to the extent that the proceeds thereof are used promptly to purchase or redeem Securities or deposited to defease the Securities pursuant to Section 8.02;
(12) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price 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 the Company or any Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (A) the maximum aggregate liability in respect of all such obligation 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 as a liability on the face of in the balance sheet of the Company or any Restricted SubsidiarySubsidiary for more than six months, either consecutively or in the aggregate (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 (B));
(13) Indebtedness of the Company consisting of Subordinated Shareholder Funding;
(14) any Permitted Acquisition Refinancing Indebtedness;
(15) Acquired Indebtedness of a Restricted Subsidiary; provided that, on a pro forma basis after giving effect to the incurrence of such Acquired Indebtedness, the Consolidated Leverage Ratio of the Company would be less 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; and
(1516) the incurrence by additional Indebtedness of the Company or any of and 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 (15), not to exceed the greater of (i) $75.0 £25.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any one time outstanding. For purposes of determining compliance with this Section 4.09, 4.10:
(1) in the event that 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 (1516) aboveof Section 4.10(b), or is entitled to be incurred pursuant to Section 4.09(a4.10(a), the Company will be permitted to dividemay, in its sole discretion, classify and reclassify such item of Indebtedness or Preferred Stock on the date of its incurrenceincurrence or, or subject to clause (2) below, later redivide or reclassify all or a portion of such item of Indebtedness, 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 this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause 4.10;
(12) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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, terms and the payment of dividends or distributions on Preferred Disqualified Capital Stock or Disqualified Preferred Stock in the form of additional securities shares of the same class of Preferred Disqualified Capital Stock or Disqualified Preferred Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 discount4.10;
(b3) the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to 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 Indebtedness, liability in the case of any other Indebtednessrespect thereof determined in accordance with GAAP; and
(c5) if obligations in respect of letters of credit, bankers’ acceptances or other similar instruments are incurred pursuant to any Credit Facility and the letters of credit, bankers’ acceptances or other similar instruments relate to other Indebtedness, then such other 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 Personshall not be 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 Company Borrower Agent and the Parent Guarantors will not, and 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 Company Parent Guarantors and the Borrower Agent will not issue any Disqualified Stock and will not permit any of its their Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Borrowers and the 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 Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyPyxus 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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock 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.
(b) The provisions of Section 4.09(a10.03(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”):
(1i) the incurrence by the Issuers and the Guarantorsany Parent Guarantor, any Borrower or any of their Restricted Subsidiaries of Indebtedness and letters of credit under (A) the Exit Term Loan Credit Facilities Agreement and (B) the Exit Notes 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 Company and its Restricted Subsidiaries thereunderi) not to exceed an aggregate amount equal to $607,000,000, plus any interest that is paid in kind (and, in the greater case of each of the foregoing clauses (iA) $700.0 million and (iiB), any Permitted Refinancing Indebtedness in respect thereof) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence(collectively, “Permitted Exit Financing Indebtedness”);
(2ii) the incurrence by the Company Parent Guarantors, the Borrowers and its their Restricted Subsidiaries of the Existing Indebtedness;
(3iii) Indebtedness created hereunder and under the other Loan Documents;
(iv) the incurrence by the Issuers and 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 Company 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 or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4)amount, not to exceed the greater of (i) $45.0 21.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture Agreement to be incurred under Section 4.09(a10.03(a) hereof or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xvii) of this Section 4.09(b10.03(b);
(6vi) the incurrence by the Company or any Borrower, any Parent Guarantor and/or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among from the Company 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 Company extent owed by the Borrower Agent or any Guarantor is the obligor on such Indebtedness and 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 or any Guarantee thereof then due with respect to the Noteshereunder, in the case of the Company, 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 Company any Parent Guarantor, any Borrower or a any of their Restricted Subsidiary of the Company and (ii) any sale Subsidiaries owns or other transfer of holds any such Indebtedness to a Person that is not either Indebtedness, such date shall be deemed the Company or a Restricted Subsidiary date of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company 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 CompanyParent Guarantors’ or any Borrower’s Restricted Subsidiaries to the Company any Parent Guarantor, to any Borrower or to any of its their Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, provided however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company a Parent Guarantor, a Borrower or a Restricted Subsidiary of the Companya Parent Guarantor or a Borrower; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company a Parent Guarantor, a Borrower or a Restricted Subsidiary of the Company, a Parent Guarantor or a Borrower; will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by the Company any Borrower, any Parent Guarantor or any of its their Restricted Subsidiaries of Hedging ObligationsObligations entered into in order to manage existing or anticipated interest rate, exchange rate or commodity price risks and not for speculative purposes;
(9ix) 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 the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness of the Company any Parent Guarantor, any Borrower or a Restricted Subsidiary of the Company any Parent Guarantor or any Borrower to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesLoans, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10xii) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance 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;
(11xiii) the incurrence by the Company any Parent Guarantor, any Borrower or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or owing under overdraft facilities in connection with cash management arrangements and 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 DaysBank Product Obligations;
(12xiv) 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; and
(15) the incurrence by the Company or any of its Restricted Foreign 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 (15), outstanding not to exceed the greater of (ia) $75.0 975 million and (iib) 5.0the 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 Company’s Adjusted Consolidated Net Tangible Assets determined 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 carrying unsold tobacco inventories held against Confirmed Orders and other Guarantees by any Parent Guarantor, any 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 date Borrower Agent or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence 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 Borrower Agent or issuanceany 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 4.0910.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xvii) above, or is entitled to be incurred pursuant to Section 4.09(a10.03(a), hereof, the Company Borrower Agent 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.0910.03. Permitted Exit Financing Indebtedness may be incurred solely under the Credit Agreement 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 (1i) of the definition of Permitted DebtDebt and may not be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company Borrower Agent as accrued 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 incurred. Notwithstanding any other provision of this Section 10.03, the maximum amount of Indebtedness that any Parent Guarantor, any Borrower or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 10.03 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(ai) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bii) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(ciii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) 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 Company Suburban Propane will not, and 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 Company Suburban Propane 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 Issuers Suburban Propane may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Consolidated Fixed Charge Coverage Ratio for the CompanySuburban 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 such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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.
(b) The provisions of Section 4.09(a10.10(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 Issuers Suburban Propane and the Guarantors, any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Suburban Propane and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 400.0 million and (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company Suburban Propane and any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesInitial Notes;
(4) the incurrence by the Company 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 repair, to the extent the improvements or repairs may be capitalized in accordance with GAAP, or additions, including by way of acquisitions of businesses and related assets, to the purchase price or cost property and assets of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of Suburban Propane and its Restricted Subsidiaries, including, without limitation, the acquisition of assets subject to operating leases or incurred by assumption in an connection with additions, including additions by way of acquisitions or capital contributions of businesses and related assets, to the property and assets of Suburban Propane and its Restricted Subsidiaries; provided, that the aggregate principal amount outstanding, including all Permitted Refinancing of Indebtedness incurred to renew, refund, refinance, replace, defease or discharge outstanding at any Indebtedness incurred time pursuant to this clause (4), may not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any one time outstanding;
(5) the incurrence by the Company 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 renew, refund, refinance, replace, defease or discharge any discharge, 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 was permitted by this Supplemental Indenture to be incurred under Section 4.09(a10.10(a) or clauses (2), (3), (4), (5), (14) or (155) of this Section 4.09(b10.10(b);
(6) the incurrence by the Company or Suburban Propane and any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Suburban Propane and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor an Issuer is the an obligor on such Indebtedness and the payee is not the Company an 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 Company, 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 Company Suburban Propane or a Restricted Subsidiary of the Company Suburban Propane and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Suburban Propane or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanySuburban Propane’s Restricted Subsidiaries to the Company Suburban Propane or to any of its Restricted Subsidiaries of any units or shares of Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the Company, 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 the Company or Suburban Propane and any of its Restricted Subsidiaries of non-speculative Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Issuers or any of its their Restricted Subsidiaries of Indebtedness of the Company Issuers or a Restricted Subsidiary of the Company to the extent Issuers that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.10; provided provided, that if the Indebtedness being guaranteed is incurred by one or both of the Issuers and is subordinated to or pari passu with the Notes, then the Guarantee must guarantee of such Indebtedness by any Restricted Subsidiary of the Issuers 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 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;
(11) the incurrence by the Company 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 inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(1211) the incurrence by the Company Suburban Propane or any of its Restricted Subsidiaries of inIndebtedness 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-kind insurance or similar obligations relating to net oil or natural gas balancing positions arising and bank overdrafts (and letters of credit in respect thereof) incurred in the ordinary course of business;
(1312) the incurrence by Suburban Propane or any obligation of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company indemnities or any Restricted Subsidiary of the Company providing for indemnification, adjustment other similar obligations in respect of purchase price, earn outs, or similar obligations, in each case, incurred or assumed price adjustments in connection with the disposition of property or acquisition assets;
(13) (i) Indebtedness of Suburban Propane or any of its Restricted Subsidiaries acquired after the date hereof and (ii) Indebtedness of any businessPerson merged or consolidated with or into Suburban Propane or any of its Restricted Subsidiaries after the date hereof, assets which Indebtedness in each case, exists at the time of such acquisition, merger, consolidation or Capital Stock conversion and is not created in contemplation of a Restricted Subsidiary in a transaction such event and where such acquisition, merger or consolidation is otherwise permitted by this Supplemental Indenture; provided provided, that such obligation is the aggregate principal amount of Indebtedness under this clause (13) shall not reflected as a liability on the face of the balance sheet of the Company or at any Restricted Subsidiary;time exceed $25.0 million; and
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Suburban Propane 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 (1514), not to exceed the greater $40.0 million. The Issuers will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as 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 date Issuers solely by virtue of such incurrence being unsecured or issuanceby virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.0910.10, 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 (1514) aboveof this Section 10.10, or is entitled to be incurred pursuant to Section 4.09(a10.10(a), the Company Issuers 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 10.10; provided, that Indebtedness under the Credit Agreement Facilities outstanding on the date on which the Initial Notes are first were originally issued and authenticated under this Supplemental Indenture will initially be was deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtDebt and cannot be so reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided 10.10. Notwithstanding any other provision of this Section 10.10, the maximum amount of Indebtedness that the amount thereof Suburban Propane or any Restricted Subsidiary may incur pursuant to this covenant shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets asset at the date of determination; , and
(2b) the amount of the Indebtedness of the other 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors (if any) may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, 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.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability reimbursement obligations of the Company and its Restricted Subsidiaries thereunder) not to exceed the sum of (a) the greater of (i) $700.0 250.0 million and (ii) $175.0 million plus 35.0the Borrowing Base and (b) 7% of the Company’s Adjusted Consolidated Net Tangible Assets determined revolving commitments then in effect thereunder (provided, that all such Indebtedness that is incurred in reliance on this subclause (b) consists solely of protective advances and overadvances by the date of such incurrencelenders or agent thereunder);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (provided such Indebtedness is incurred prior to or within 180 days after such purchase or completion of such design, in an aggregate principal amount outstandingconstruction, including all Permitted Refinancing installation or improvement) and Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount not to exceed the greater of (i) $45.0 10.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (153) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) that any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) , and any sale or other transfer of any such Preferred Stock 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 preferred stock by the Company or such Restricted Subsidiary Subsidiary, as the case may be, that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee incurrence by the Company or any of its Restricted 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 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 guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence or provision by the Company or any of its Restricted Subsidiaries of Indebtedness (including Guarantees thereof) in respect of workers’ compensation claims, self-insurance obligations or obligations, bankers’ acceptances, indemnity, bid, plugging and abandonmentperformance, warranty, release, 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;
(1112) 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 extinguished within five Business Daysbusiness days after the Company receives notice of the incurrence thereof;
(1213) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness to the extent that the net oil proceeds thereof are immediately deposited to defease the Notes in full or natural gas balancing positions arising discharge this Indenture, in each case, in accordance with the ordinary course terms of businessthis Indenture;
(1314) any obligation arising from agreements of the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of the Company Indebtedness arising from agreements providing for bona fide indemnification, adjustment of purchase price, earn outs, earnout or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, asset or Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of 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 such balance sheet for purposes of this clause (a)); and (b) the maximum liability in respect of 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 such non-cash proceeds 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 Company and its Restricted Subsidiary in a transaction permitted connection with such disposition;
(15) the incurrence 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 SubsidiaryGuarantor 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;
(14A) 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 Permitted Acquisition Indebtednessobligations 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
(15C) 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 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 (1516), not to exceed the greater $5.0 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 (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the date Notes and the applicable Note Guarantee to substantially the same extent; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of such incurrence payment to any other Indebtedness solely by virtue of being unsecured or issuance. by virtue of being secured on junior priority basis.
(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 clauses (1) through (1516) aboveof Section 4.09(b), 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement 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 DebtSection 4.09(b)(1). The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, the accretion of principal 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 preferred 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued accrued. The incurrence of an obligation to pay a premium in respect of Indebtedness arising in connection with a notice of redemption or the extent required by making of a mandatory offer to repurchase such Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. Notwithstanding any other provision of this Section 4.09, the definition maximum amount of Indebtedness that the Company or any of its Restricted Subsidiaries 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, and 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 term. amount of Indebtedness shall be excluded from such determination.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other PersonPerson 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock or Disqualified Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock or Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers and the Guarantors, any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 750.0 million and (ii) $175.0 400.0 million plus 35.035% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness or any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers and 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 the related Note Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 25.0 million and (ii) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (1511) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Subsidiary 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(1511) 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 (1511), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (1511) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Agreement Facilities outstanding on as of the date on which Notes are first issued and authenticated under of this Indenture after giving effect to the use of proceeds of the initial offering of the Notes 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 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 Section 4.09; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Company and the Guarantors, Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 550.0 million, (ii) $175.0 million plus 35.032.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence and (iii) the Borrowing Base at the time of incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 65.0 million and (ii) 3.03.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed exceed, at any one time outstanding, the greater of (i) $75.0 65.0 million and (ii) 5.03.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability reimbursement obligations of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence30.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1412) or (1516) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) that any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) , and any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.094.09(b); 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 Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance 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;
(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 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 in-kind 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 relating to net oil or natural gas balancing positions arising in the ordinary course of businessbusiness consistent with past practices;
(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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness arising from agreements providing for bona fide indemnification, adjustment of purchase price, earnout or similar obligations, in each case, incurred or assumed in connection with the issuance acquisition or disposition of any business, asset or Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that (a) such Indebtedness is not reflected on the Company’s balance sheet or that of 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 such balance sheet for purposes of this clause (15)(a)); and (b) the maximum assumable liability in respect of 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 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 Company and its Restricted Subsidiary in connection with such disposition; and
(16) the incurrence by the Company or any of any Disqualified Stock 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 or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person15.0 million.
Appears in 2 contracts
Sources: Indenture (CPM Holdings, Inc.), Indenture (CPM Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any shares of Preferred Stock; provided, however, that the Issuers Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stock, if 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 as of the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will hereof shall 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”):
(1i) the incurrence by the Issuers Issuer and the Guarantors, its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities Facilities, excluding the Senior Interim Loan Credit Agreement, in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderface amount thereof) not to exceed $3,900.0 million, less the greater aggregate amount of (i) $700.0 million all Net Proceeds of Asset Sales applied by the Issuer or any Restricted Subsidiary since the Acquisition Closing Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10;
(2ii) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) (a) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the 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 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, Disqualified Stock and Preferred Stock incurred for by the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment that is used or useful in a Permitted Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets, in an aggregate principal amount outstandingamount, including all together with any Permitted Refinancing Indebtedness incurred to renewin respect thereof and all other Indebtedness, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to Disqualified Stock and/or Preferred Stock issued and outstanding under this clause (4), iv) not to exceed the greater of (i) $45.0 125.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined at any time outstanding; so long as of such Indebtedness exists at the date of such incurrence purchase, lease or issuanceimprovement, or is created within 270 days thereafter;
(5v) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2ii), (3iii), (4iv), (5v), (14xiii), (xv), (xxi), (xxii) or and (15xxiii) of this Section 4.09(b)) including additional Indebtedness incurred to pay premiums and fees in connection therewith;
(6vi) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company Issuer and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A1) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 Company, 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 Company Issuer or a Restricted Subsidiary of the Company and Issuer, or (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company Issuer or to any Restricted Subsidiary of its Restricted Subsidiaries shares of any Preferred Stock; provided, however, that:
that any (A1) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Issuer or a Restricted Subsidiary of the Company; and
Issuer, or (B2) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, 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 (7vii);
(8) viii) the incurrence by the Company Issuer or any Restricted Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(1) the guarantee by the Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company to the extent Issuer 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed 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;
(10x) the incurrence Indebtedness incurred by the Company Issuer 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 and any Guarantees or constituting reimbursement obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims 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;
(11xi) the incurrence by the Company Issuer or any of its Restricted Subsidiaries 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 Daysbusiness days;
(12xii) the incurrence by the Company receivables or any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising factoring arrangements in the ordinary course of business;
(13xiii) any obligation Indebtedness arising from agreements of the Company Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Restricted Subsidiary in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that provided, however, that
(1) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company Issuer or any Restricted SubsidiarySubsidiary 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;
(14xiv) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andRestricted 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;
(15xv) 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 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 in the ordinary course of business;
(xviii) 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 the Company or any of its Restricted Foreign 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 outstandingoutstanding pursuant to this clause (xxii), 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 (15xxii), not to exceed $125.0 million (or the greater equivalent thereof, measured at the time of each incurrence, in applicable foreign currency); and
(ixxiii) $75.0 million and (ii) 5.0% Indebtedness, Disqualified Stock or Preferred Stock of the Company’s Adjusted Consolidated Net Tangible Assets determined as Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of the date of such incurrence 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 issuancedischarge 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 (1i) through (15xxiii) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company Issuer 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture 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 or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided . Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the amount thereof Issuer or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;; and
(b2) 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 (Allison Transmission Holdings Inc), Indenture (Allison Transmission Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Company and the GuarantorsRestricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 1,800.0 million, (ii) $175.0 million plus 35.0the Borrowing Base at such time, and (iii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or other acquisition cost or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 450.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), or (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 businessbusiness 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 five 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; and;
(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 (1516), not to exceed exceed, at any one time oustanding, the greater of (i) $75.0 650.0 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 event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1520) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on or prior to the date on which Notes are first issued and authenticated under this Indenture 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 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.. For purposes of determining compliance with any 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 case of revolving credit debt, the date such Indebtedness was first committed or first incurred (whichever yields the lower U.S. dollar equivalent)); provided that if such Indebtedness is incurred or Disqualified Stock or Preferred Stock is issued to refinance other Indebtedness, 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 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 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 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 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 Company will not, and 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 Company will not and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Unsecured Notes Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) above 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 of Indebtedness under Credit Facilities by the Issuers 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 Guarantors, 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 Company and its Restricted Subsidiaries of Existing Indebtedness;
(3) the incurrence by the Company and any Restricted Subsidiary of Indebtedness and represented by letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) 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 Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence);
(24) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture Issue Date and the related Note Guarantees;
(45) the incurrence by the Company or any of its Restricted Subsidiaries 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 price, lease expense, rental payments or cost of design, construction, installation or improvement of propertyproperty (including Vessels), plant or equipment or other assets (including Capital Stock) used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness Indebtedness, incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4Section 4.09(b)(5), not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.02.5% of 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 Company’s Adjusted Consolidated Net Tangible Assets contract price for the acquisition of such Vessel, as determined as of on the date on which the agreement for construction of such incurrence Vessel was entered into by the Company or issuanceits Restricted Subsidiary, plus any other Ready for Sea Cost of such Vessel;
(56) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14Sections 4.09(b)(2) or (15b)(4) of hereof or this Section 4.09(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 Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and or any of its Restricted SubsidiariesSubsidiary; provided, however, provided that:
(Aa) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyIssuer, 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.09(b)(9);
(710) the issuance by any of the Company’s Restricted Subsidiaries Subsidiary to the Company or to any of its Restricted Subsidiaries of any Preferred Stockpreferred stock; provided, however, provided that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7Section 4.09(b)(10);
(8) 11) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(912) the Guarantee by the Company or any of its Restricted Subsidiaries Unsecured Notes Guarantor of Indebtedness of the Company Company, any Unsecured Notes Guarantor or a Restricted Subsidiary of the Company any ▇▇▇▇▇ Act Compliant Entity 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 NotesNotes or a Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1013) 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 obligations or bidand workers compensation obligations; provided, plugging and abandonmenthowever, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by that upon the Company or a Restricted Subsidiary in the ordinary course drawing of business and any Guarantees or such letters of credit functioning as or supporting any of the foregoing bonds or other instrument, such obligations and workers’ compensation claims in the ordinary course of business;
are reimbursed within 30 days following such drawing; (11iii) 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;
30 days; and (12iii) consisting of (x) the incurrence by the Company financing of insurance premiums or any of its Restricted Subsidiaries of in(y) take-kind or-pay obligations relating to net oil or natural gas balancing positions arising contained in supply agreements, in each case, in the ordinary course of business;
(1314) Indebtedness of any obligation 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 assumption of related liabilities) the Company or any Restricted Subsidiary (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 Restricted Subsidiary or was otherwise acquired by the Company or a Restricted Subsidiary); provided, however, with respect to this Section 4.09(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);
(15) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for customary indemnification, adjustment obligations in respect of earnouts or other adjustments of purchase priceprice or, earn outsin each case, or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, business or assets or Capital Stock 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 a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face form of Unearned Customer Deposits and advance payments received in the balance sheet 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 SubsidiarySubsidiary incurred in connection with credit card processing arrangements entered into in the ordinary course of business;
(14) any Permitted Acquisition Indebtedness; and
(1518) 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 additional 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 of or any Disqualified Stock Restricted Subsidiary 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 (1520), not to exceed the greater of (i) $75.0 100.0 million and (ii) 5.02.5% of the Company’s Adjusted Consolidated Net Total Tangible Assets determined as (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 incurrence 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 issuance. 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 clauses (1Section 4.09(b)(1) through (15Section 4.09(b)(20) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Company, in its sole discretion, will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or 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. Indebtedness under the Credit Agreement 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 .
(1e) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.sa
Appears in 2 contracts
Sources: Indenture (Viking Holdings LTD), Indenture (Viking Holdings LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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) (a) the incurrence by the Issuers and the Guarantors, Company or any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities which excludes the Notes issued on the date of and 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 Company and its Restricted Subsidiaries thereunder) not to exceed $650.0 million less the greater aggregate principal amount of all Indebtedness incurred under clause (ib) $700.0 million 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 (iib) $175.0 million plus 35.0% Indebtedness incurred by a Receivables Entity in a Qualified Receivables Transaction that is not recourse to the Company or any of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of its Restricted Subsidiaries (except for Standard Securitization Undertakings); provided, however, that after giving effect to any such incurrence, the aggregate amount of all indebtedness incurred under this clause (b) and then outstanding does not exceed $650.0 million less the aggregate principal amount of all Indebtedness incurred under clause (a) of this paragraph;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of real or personal property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (whether through the direct acquisition or otherwise of such assets or the acquisition of Equity Interests of any Person owning such assets), in an aggregate principal amount outstandingfor all Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 30.0 million and (ii) 3.02.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), ) through (5), (14), (15) or (1517) through (22) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note 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 Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer of any such Preferred Stock 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 of the CompanySubsidiary, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) (i) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 and (ii) the guarantee by a Restricted Subsidiary of the Company of Indebtedness of the Company or another Restricted Subsidiary of the Company incurred in accordance with the terms of this Indenture; provided, in each case, that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or any Note Guarantee, then the Guarantee must 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 insurance financing arrangements, take or pay obligations contained in supply agreements, and obligations in respect of, workers’ compensation claims, self-insurance obligations or bidobligations, plugging and abandonment, appeal, reimbursementbankers’ acceptances, performance, completion and surety bonds, appeal bonds, completion guarantees and similar bonds and completion guarantees provided 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 a such Restricted Subsidiary in Subsidiary, as the ordinary course of business and any Guarantees or letters of credit functioning as or supporting case may be, opened to provide security for any of the foregoing bonds or obligations and workers’ compensation claims foregoing) 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 DaysDays and obligations in connection with netting services;
(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 Indebtedness arising from agreements of the Company or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the sale or other 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, 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 Permitted Acquisition Indebtedness; andIndebtedness 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 additional 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 instruments or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(16) 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 issuance 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 any 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 Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of all of the Capital Stock of a Person that becomes a Restricted Subsidiary or all or substantially all of the assets of a Person, in each case, engaged in a Permitted Business having an aggregate principal amount 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 (19), 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
(22) 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 or Disqualified Stock issued pursuant to this clause (1522), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancemillion. For purposes of determining compliance with this Section 4.09, in the event that 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 (1522) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company (in its sole discretion) will be permitted to divide, divide and classify and reclassify such item of Indebtedness (or any portion thereof) on the date of its incurrence, or later redivide or and later, from time to time, 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 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment or accrual of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued 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 extent required by contrary, any net cash proceeds, marketable securities or Qualified Proceeds utilized for any Restricted Payment pursuant to clause (3)(B) of Section 4.07(a), or clauses (2), (5) or (17) of Section 4.07(b), or that are utilized for the definition incurrence of Indebtedness pursuant to clause (19) of this Section 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 excluded from, and such termnet cash proceeds shall not include the net cash proceeds utilized to incur indebtedness under, Section 4.09(b)(19). The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) 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.amoun
Appears in 2 contracts
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, in each case, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom). The first paragraph of this Section 4.09 shall not, 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.
(b) Section 4.09(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”):
): (1i) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of of: (iA) $700.0 million 1,250.0 million; and (iiB) $175.0 million plus 35.030.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
; (2ii) (A) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
Indebtedness or (3B) the incurrence by the Issuers Company or any of its Restricted Subsidiaries of Indebtedness under the New Real Estate Facility (whether or not issued and outstanding as of the Guarantors Issue Date) in each case of this clause (B), in amounts contemplated by the documentation for the New Real Estate Facility at the date of closing of the LHM Acquisition; (iii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date Issue Date; (iv) the incurrence by the Company or any of this Indenture and the related Note Guarantees;
its Restricted Subsidiaries of Indebtedness under Floor Plan Facilities; (4v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refund or discharge refinance any Indebtedness incurred pursuant to this clause (4v), not to exceed exceed, at any time outstanding, the greater of (i) $45.0 200.0 million and (ii) 3.02.75% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuance;
incurrence; (5vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2ii), (3iii), (4), (5), (14) or (15vi) of this Section 4.09(b);
paragraph; provided that to the extent such Permitted Refinancing Indebtedness refinances (6x) other than the Indebtedness junior to the Notes or a Guarantee, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee, as applicable, or (y) Disqualified Stock or preferred stock, such Refinancing Indebtedness is Disqualified Stock or preferred stock; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or owing to a GuarantorRestricted Subsidiary, 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 Company, or the Note Subsidiary Guarantee, in the case of a Guarantor; and
and (B) (iI) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiII) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vii);
; (7viii) 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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
Obligations in the ordinary course of business and not for speculative purposes; (9ix) (A) the Guarantee guarantee by the Company 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 4.09 and (B) Indebtedness being guaranteed is subordinated to incurred on behalf of, or pari passu with the Notesrepresenting guarantees of Indebtedness of, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by joint ventures of 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 not to exceed for the avoidance of doubt, in the ordinary course case of business this clause (B), at any time outstanding, the greater of (x) $150.0 million and any Guarantees or letters of credit functioning as or supporting any (y) 2.0% of the foregoing bonds or obligations and workers’ compensation claims in Consolidated Total Assets as of the ordinary course date of business;
such incurrence; (11x) 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 fundsfunds in the ordinary course of business, so long as provided that such Indebtedness is covered extinguished within five Business Days;
Days of its incurrence; (12xi) Obligations in respect of (A) performance, bid and surety or appeal bonds, letters of credit, completion guarantees, self-insurance obligations or workers compensation claims in the ordinary course of business and (B) agreements providing for indemnification, adjustment of purchase price, earn-outs or similar obligations incurred in connection with the acquisition or disposition of any business, assets or subsidiary; (xii) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; (xiii) Indebtedness consisting of the financing of insurance premiums; (xiv) Indebtedness consisting of Guarantees incurred in the ordinary course of business under repurchase agreements or similar agreements in connection with the financing of sales of goods in the ordinary course of business; (xv) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness under Mortgage Loans in an amount incurred pursuant to net oil or natural gas balancing positions arising in this clause (xv) not to exceed the ordinary course greater of business;
(13) any obligation arising from agreements $525.0 million and 7.0% of Consolidated Total Assets as of the Company or date of such incurrence at 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 Indenturetime outstanding; 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; and
(15xvi) 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 outstandingwhich, including when taken together with all Permitted Refinancing other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such incurrence and incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), xvi) does not to exceed the greater of (i) $75.0 450.0 million and (ii) 5.06.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence incurrence; and (xvii) Indebtedness, Disqualified Stock or issuancePreferred Stock of (x) the Company or a Restricted Subsidiary incurred to finance an acquisition or (y) Persons that are acquired by the Company or any Restricted Subsidiary or merged into or consolidated with the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition, merger or consolidation, 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 the first paragraph of this Section 4.09, or (B) the Fixed Charge Coverage Ratio is greater than or equal to the Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation. 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 (1i) through (15xvii) aboveof the preceding paragraph, or is and may also be entitled to be incurred in whole or in part pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will be permitted to divide, divide and classify and reclassify such item of Indebtedness on the date of its incurrence, or incurrence and later redivide or divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; for the avoidance of doubt, any Incurrence of Indebtedness may, if applicable, be classified in part as being Incurred and outstanding under the first paragraph of this Section 4.09 and in part as being Incurred and outstanding under one or more categories of Permitted Debt. Indebtedness under the Credit Agreement that was outstanding on the Issue Date under Credit Facilities under clause (i) of the definition of Permitted Debt and Indebtedness that was outstanding under clause (ii)(B) of the definition of Permitted Debt as of the initial closing date on which Notes are first issued and authenticated under this Indenture of the LHM Acquisition (whether for all or less than all of the assets currently intended to be acquired) will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1i) or clause (ii)(B), as applicable, of the definition of Permitted DebtDebt and unless repaid may not be reclassified. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsand dividends, 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, changes to amounts outstanding in respect of Hedging Obligations solely as a result of fluctuations in interest rates, the reclassification assumption or guarantee of Preferred Stock Indebtedness of a Restricted Subsidiary by the Company or Disqualified Stock as Indebtedness due to a change in accounting principles, another Restricted Subsidiary and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries in the form of additional securities shares of the same class of Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock of Restricted Subsidiaries for purposes purpose of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (Asbury Automotive Group Inc), Indenture (Asbury Automotive Group Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness issue preferred stock (including Acquired DebtDisqualified Stock) or issue Preferred Stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) 4.03 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”):
(1a) the incurrence by the Issuers Company and the Guarantors, its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence2.75 billion;
(2b) Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4d) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4d), not to exceed the greater of (i) $45.0 100.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5e) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this the Indenture to be incurred under the first paragraph of this Section 4.09(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), (14m), (n) or this clause (15e) of this Section 4.09(b)paragraph;
(6f) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of 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 (ii) exchange rate risk with respect to obligations under any agreement or Indebtedness, or with respect to any asset, of such Person that is payable or denominated in a currency other than U.S. Dollars;
(9h) the Guarantee by the Company or any of its the 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 guaranteed4.03;
(10i) 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 preferred stock (including Disqualified Stock) in the form of additional shares of the same class of preferred stock (including Disqualified Stock) will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock (including Disqualified Stock) for purposes of this Section 4.03; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(j) the issuance of Convertible Subordinated Debentures and/or the issuance of Convertible Preferred Stock in an aggregate principal amount (with the liquidation value of the Convertible Preferred Stock being treated as its principal amount for this purpose) not to exceed $750.0 million at any one time outstanding pursuant to this clause (j), plus the issuance of any related securities issued by a subsidiary trust or similar financing vehicle in connection therewith;
(k) Indebtedness of the Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries of Indebtedness guarantees, indemnities, hold backs or obligations in respect of self-insurance purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock of Restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided 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 a any Restricted Subsidiary in or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the ordinary course of business and any Guarantees or extent that such letters of credit functioning and other obligations, as or supporting any of the foregoing bonds or obligations and case may be, are intended to provide security for workers’ compensation claims claims, payment obligations in connection with self-insurance, in connection with participation in government reimbursement or other programs or other similar requirements in the ordinary course of business;
(11m) 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 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 Indebtedness to the Company providing for indemnification, adjustment extent the proceeds thereof are used to purchase Notes pursuant to a Change 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 IndebtednessControl Offer; and
(15n) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or (which may include, but is not limited to, Indebtedness of the issuance by types referred to in the Company of any Disqualified Stock 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15n), not to exceed $200.0 million.
(o) the greater incurrence by the Company and its Restricted Subsidiaries of the Indebtedness under the 364-Day Credit Facility in an aggregate principal amount at any one time outstanding under this clause (io) not to exceed (a) $75.0 million and 1.9 billion minus (iib) 5.0% amounts applied to repay Indebtedness under the 364-day Credit Facility, including with net proceeds from the Concurrent Financing Transactions;
(p) Indebtedness of a Restricted Subsidiary outstanding on the date on which such Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary (other than Indebtedness incurred as consideration in, or to provide all or any portion of the Company’s Adjusted Consolidated Net Tangible Assets determined as funds or credit support utilized to consummate, the transaction or series of transactions pursuant to which such Restricted Subsidiary became a Subsidiary of the date Company or was otherwise acquired by the Company), provided that after giving effect thereto, (a) the Company would be permitted to incur at least $1 of such incurrence additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph above, or issuance(b) the Fixed Charge Coverage Ratio would be no worse than immediately prior thereto. For purposes of determining compliance with this Section 4.094.03, 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 (1a) through (15n) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.03, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.094.03. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1a) of the definition of Permitted Debt. The accrual Company will not permit any of interest its Subsidiaries (other than Purchasing) to Guarantee the 3.25% Convertible Senior Debentures due 2035 or Preferred Stock or Disqualified Stock dividends or distributionsany Permitted Refinancing Indebtedness incurred in respect thereof pursuant to clause (5) of the immediately preceding paragraph, the accretion or amortization of original issue discount, the payment of interest on except that any such Permitted Refinancing Indebtedness not secured may be Guaranteed by a Lien in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due Guarantor on a basis subordinated 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other PersonGuarantor’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 Company Issuer will not, and 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 Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the CompanyIssuer’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, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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 or the Disqualified Stock or the 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 further that the aggregate principal amount of Indebtedness that may be incurred and the liquidation preference of Preferred Stock that may be issued pursuant to the foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $100.0 million at any one time outstanding.
(b) Section 4.09(a4.10(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) Indebtedness under the Notes and one or more Credit Agreements together with the incurrence by of the Issuers guarantees thereunder and the Guarantors, issuance and creation of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) 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 Company face amount thereof) and its Restricted Subsidiaries 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 (iA) $700.0 1,550.0 million and (iiB) $175.0 million plus 35.0% the maximum aggregate principal amount (as of the Company’s Adjusted Consolidated Net Tangible Assets determined on 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), any Indebtedness incurred under this clause (1) (whether or not secured), other than Revolving Credit Agreement Indebtedness, will be included in the amount of Senior Secured Indebtedness for purposes of calculating the Senior Secured Indebtedness to EBITDA Ratio);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness[reserved];
(3) the incurrence by the Issuers Existing Unsecured Notes and the Guarantors 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 the related Note Guarantees(7));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred by the Company 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 or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation lease or improvement of property, plant property (real or personal) or equipment that is used or useful in a Permitted Business (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstandingthat, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness and/or Preferred Stock then outstanding and incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred issued pursuant to this clause (4), does not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Subsidiary constituting reimbursement obligations with respect to the Notes, in the case of the 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property casualty or liability insurance or self insurance; 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;
(116) 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 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 Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition 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 that such Indebtedness is not reflected on the balance sheet of the Issuer 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);
(7) Indebtedness of the Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) 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 transaction 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 Preferred Stock;
(9) Hedging Obligations of the 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 Restricted Subsidiary or obligations in respect of 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 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 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 could have incurred such Indebtedness or Preferred Stock under Section 4.10(a) without reliance on this clause (11));
(a) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as (in the case of any such 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 this IndentureSection 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 obligation Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not reflected as a liability on less than the face remaining Weighted Average Life to Maturity of the balance sheet 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 a Guarantor that refinances Indebtedness or Preferred Stock of the Company Issuer or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary, (D) shall not be in 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 Restricted Subsidiaryfees, premiums, underwriting discounts, costs and expenses relating to such extension, replacement, refunding, refinancing, renewal or defeasance, and (E) shall not have a Stated Maturity date prior to the Stated Maturity of the Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased and provided, further, that subclauses (A), (B) and (E) of this clause (13) will not apply to any refunding or refinancing of any Indebtedness under any Credit Agreement;
(14) Indebtedness or Preferred Stock of (A) the Issuer or a Restricted Subsidiary incurred to finance an acquisition of any Permitted Acquisition assets (including Capital Stock), business or Person or (B) 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 such acquisition, merger or consolidation (including the incurrence of such Indebtedness; and) either (x) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio Exception or (y) the Fixed Charge Coverage Ratio would be equal to or greater than immediately prior to such acquisition, merger or consolidation;
(15) Indebtedness arising from the incurrence honoring by a bank or financial institution of a check, draft or 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;
(16) Indebtedness of the Issuer or any Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to any 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) (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 Company 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 additional Equity Interests permitted by Section 4.11;
(22) Indebtedness of the Issuer or the issuance by the Company any 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 the greater its Restricted Subsidiaries consisting of (i) $75.0 million and the financing of insurance premiums or (ii) 5.0% take or pay obligations contained in supply arrangements, in each case incurred in the ordinary course of business; and
(23) Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as 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 date ordinary course of such incurrence or issuance. business.
(c) For purposes of determining compliance with this Section 4.094.10, (a) in the event that an item of Indebtedness or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt or Preferred Stock described in clauses (1) through (1523) above, above or is entitled to be incurred pursuant to Section 4.09(a)the Coverage Ratio Exception, the Company Issuer, in its sole discretion, will be permitted to divide, classify and or reclassify such item of Indebtedness on the date of its incurrence, or later redivide Preferred Stock (or reclassify all or a any portion of such item of Indebtedness, thereof) in any manner that complies with this Section 4.09. 4.10 and will only be required to include the amount and type of such Indebtedness under or Preferred Stock (or portion thereof) in one of the Credit Agreement above clauses or paragraphs; provided that Indebtedness outstanding on the date on which Issue Date under the Senior Term Loan Agreement, Senior Revolving Credit Agreement and the Existing Unsecured Notes are first issued shall be classified as incurred under Section 4.10(b), and authenticated not under this Indenture the Coverage Ratio Exception; (b) at the time of incurrence, the Issuer will initially be deemed entitled to have been incurred on such date divide and classify an item of Indebtedness in reliance on the exception provided by clause (1) more than one of the definition types of Permitted Debt. The accrual Indebtedness described in the first and second paragraphs above; and (c) the principal amount of Indebtedness outstanding under any clause of this 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 Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of accreted value, the accretion or amortization of original issue discount, discount and the payment of interest on any Indebtedness not secured by a Lien or dividends in the form of additional Indebtedness with the same terms, the reclassification of or 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 Section 4.09; provided that 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 thereof of Indebtedness denominated in a foreign currency shall be included calculated based on the relevant currency exchange rate in Fixed Charges of effect on the Company as accrued to the extent required by the definition of date such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtednesswas incurred, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtednessterm debt, or first committed, in the case of any revolving credit debt; provided that if such Indebtedness is incurred to extend, replace refund, refinance, renew or defease 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.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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $300.0 million less (a) the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof and (b) less the amount of any Indebtedness of a Receivables Subsidiary outstanding under clause (13) below;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of propertyproperty (real or personal), plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (whether through the direct acquisition of such assets or the acquisition of Equity Interests of any Person owning such assets), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred under clause (5) below to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 15.0 million and at any time outstanding or (iib) 3.02.5% of Total Assets (measured at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of the date each incurrence of any such Indebtedness and giving pro forma effect to such incurrence or issuanceand the use of proceeds thereof);
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (1410) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations (other than for speculative purposes);
(9) the Guarantee guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (Innophos, Inc.), Indenture (Innophos Investment Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Issuer’s 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.3(a) will hereof shall 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 Issuers Issuer and the GuarantorsGuarantor of the Notes and the Note Guarantee in the aggregate principal amount to be issued on the Closing Date 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);
(2) the incurrence by the Issuer or any of 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;
(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 (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 5.0 billion and (iiB) $175.0 million plus 35.0% 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 Company’s Adjusted Consolidated Net Tangible Assets determined on collateral securing Indebtedness under Credit Facilities contemplated by clause (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 date maximum potential liability of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3thereunder) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes not to be issued on the date of this Indenture and the related Note Guaranteesexceed $3.0 billion;
(4) the incurrence by the Company 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 or cost of design, construction, installation or improvement of property, plant or equipment (including, without limitation, airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Company Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, extend, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a4.3(a) hereof or clauses (2), (3), (4), (5), (146), (13), (20), (21), (24) or (1525) of this Section 4.09(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 Company 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 Company and Issuer and/or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 8) the issuance by any Restricted Subsidiaries of the Company’s Restricted Subsidiaries Issuer to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer shares 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)preferred stock;
(8) 9) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries the Issuer of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.3; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the such Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations, 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 obligations to airport and governmental authorities);
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of selfany 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-insurance 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 bid, plugging and abandonment, appeal, reimbursement, performance, documentary letters of credit or banker’s acceptances;
(16) surety and similar appeal bonds and completion guarantees provided by that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Company Issuer or a any of its Restricted Subsidiary 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 Guarantees other Restricted Subsidiary of the Issuer or letters their assets (other than such Receivables Subsidiary and its assets and, as to the Issuer or any other Restricted Subsidiary of credit functioning as the Issuer, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Issuer or supporting any of its Restricted Subsidiaries owed to one or more Persons in connection with the foregoing bonds or obligations and workers’ compensation claims financing of insurance premiums in the ordinary course of business;
(1120) 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 Company 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 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 Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andof 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 the applicable Restricted Subsidiary of the Issuer;
(1524) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all Notes and 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 Guarantor Obligations and convertible into common stock of the issuance by Issuer; provided that the Company of any Disqualified Stock in an aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not exceed $1.5 billion at any time outstanding; and
(25) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance3.0 billion, at any time outstanding. For purposes of determining compliance with this Section 4.094.3, in the event that 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 (1525) above, of Section 4.3(b) hereof or is entitled to be incurred pursuant to Section 4.09(a)4.3(a) hereof, the Company Issuer 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under 4.3; provided that (A) all “Junior Secured Debt” (as defined in the Credit Agreement outstanding as in effect on the date on which Notes are first issued and authenticated under this Indenture Closing Date) will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.3(b)(21) hereof and (B) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to be incurred under clauses (1), (3) or (21) of Section 4.3(b) hereof. None of the following will constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.3:
(1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, preferred stock dividends;
(2) the accretion or amortization of original issue discount, discount (“OID”);
(3) the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, ;
(4) the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and ; and
(5) the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will 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 incurred. Notwithstanding any other provision of this Section 4.3, the maximum amount of Indebtedness that the Issuer or any of its Restricted Subsidiaries may incur pursuant to this Section 4.3 shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness fluctuations in exchange rates or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such termcurrency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the IndebtednessIndebtedness as of such date, in the case of any Indebtedness issued with original issue discountOID;
(b2) the principal amount of the IndebtednessIndebtedness as of such date, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date as of determinationsuch date; and
(2B) the amount of the Indebtedness of the other PersonPerson 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 Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness or issuances the issuance of Disqualified Stock or Preferred Stock, as applicable set forth below (collectively, “"Permitted Debt”"):
(1) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence715.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2), (3), (4), (5), (14) or (1512) of this Section 4.09(b)paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries or the refinancing or replacement of existing intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
: (Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 Company, or the Note Guarantee, in the case of a Guarantor; and
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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations 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 and not for any speculative purpose;
(9) 8) the Guarantee guarantee by the Company 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 ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of dividends on Disqualified Stock in the form of additional shares of the same extent class of Disqualified Stock shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as the Indebtedness guaranteedaccrued interest;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness, including Indebtedness represented by letters of credit for the account of the Company or any Restricted Subsidiary, incurred in respect of workers' compensation claims, self-insurance obligations or bid, plugging and abandonment, appeal, reimbursementobligations, performance, proposal, completion, 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 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; provided further, that such underlying obligation is not in respect of borrowed money;
(11) the incurrence issuance of Series B Preferred Stock by the Company or any solely for the purpose of its Restricted Subsidiaries the payment of Indebtedness arising from dividends to the honoring by a bank or other financial institution holders of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysthe Series B Preferred Stock made in accordance with the Company's Amended and Restated Charter;
(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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantors 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1512), not to exceed $60.0 million;
(13) the greater incurrence by the Company or any of (i) $75.0 million and (ii) 5.0% its Restricted Subsidiaries of Indebtedness, including but not limited to Indebtedness represented by letters of credit for the account of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or any Restricted Subsidiary, arising from agreements of the date 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 issuanceany 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 Company of indebtedness expressly subordinated to the Notes not to exceed an aggregate principal amount of $2.9 million in satisfaction of the Stockholder Litigation. The Company shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the 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. For purposes of determining compliance with the provisions in this Indenture relating to 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 (1516) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially shall 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 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
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 Company will shall not, and will 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) ), or issue shares of Disqualified Stock, Stock and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, preferred stock if the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) . The foregoing provisions will not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Issuers and Company or the Guarantors, Subsidiary Guarantors of Indebtedness and (including letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (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) under the Senior Credit Facility; provided that the aggregate principal amount of all Indebtedness (including letters of credit) outstanding under the Senior Credit Facility after giving effect to such incurrence does not exceed an amount equal to exceed $100.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of Asset Sales applied to permanently repay any such incurrenceIndebtedness pursuant to Section 4.10 hereof;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company of Indebtedness represented by the Notes and the Exchange Notes and the incurrence by the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Subsidiary Guarantees;
(4iv) 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 or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Indebtedness) of that is either the Company Existing Indebtedness or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph hereof or clauses (2ii), (3iii), (4iv), (5), (14v) or (15ix) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
that (Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the 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 Company or a Restricted Subsidiary of the Company thereof and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries a Subsidiary Guarantor of Hedging ObligationsObligations 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;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent Guarantor 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;
(10ix) 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 connection with the acquisition by the Company or a Restricted Subsidiary in of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the ordinary course prior owner of business and any Guarantees such assets 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;
(11) the incurrence such Restricted Subsidiary prior to such acquisition by the Company or any of its a Restricted Subsidiaries of Indebtedness arising from the honoring by a bank Subsidiary and was not incurred in connection with, or other financial institution of a checkin contemplation of, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence acquisition by the Company or a Restricted Subsidiary; and provided further that the principal amount of such Indebtedness does not exceed $5.0 million at any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businesstime outstanding;
(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; and
(15x) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15x), not to exceed $10.0 million; and
(xi) the greater incurrence by the Company's Unrestricted Subsidiaries of (i) $75.0 million and (ii) 5.0% Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceCompany that was not permitted by this clause (xi). For purposes of determining compliance with this Section 4.09covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15x) above, above or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement 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) Accrual of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
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 Company Partnership will not, and 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 Company Partnership will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyPartnership’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, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Partnership and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Partnership and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 150.0 million and (iiy) $175.0 million plus 35.015.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 GuaranteesIndenture;
(4) the incurrence by the Company 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 the Partnership or any Restricted Subsidiary or (ii) Indebtedness of the Partnership or any Restricted Subsidiary incurred to finance the acquisition, construction, development, design or improvement of any assets (real or personal), including Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, purchase money obligations, Disqualified Stock, synthetic lease obligations and any Indebtedness assumed in each case, incurred for connection with the purpose acquisition of financing all any such assets (real or personal) or secured by a Lien on any part of such assets before the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in acquisition thereof; provided that the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing of Indebtedness incurred to renew, refund, refinance, replace, defease or discharge outstanding at any Indebtedness incurred pursuant to time and permitted by this clause (4), ) shall not to exceed the greater of (ix) $45.0 140.0 million and (iiy) 3.015% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as at the time of the date of such incurrence or issuanceincurrence);
(5) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses clause (2), (3), (4), (5), (1412), (13) or (1518) of this Section 4.09(b);
(6) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyPartnership, 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 Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company 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 Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, 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 Company Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations not for speculative purposes;
(9) the Guarantee by the Company Partnership or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Partnership or a Restricted Subsidiary of the Company Partnership 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 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 guaranteedGuaranteed;
(10) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness in respect connection with one or more standby or trade-related letters of self-credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations obligations, workers’ compensation claims, health or bid, plugging and abandonment, appeal, reimbursement, performanceother types of social security benefits, surety and bonds, completion guarantees or other similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations, including self-bonding arrangements, in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or pursuant to self-insurance obligations and workers’ compensation claims not in connection with the ordinary course borrowing of businessmoney or the obtaining of advances;
(11) the incurrence by the Company Partnership 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 incurrence by the Company Partnership or any of its Restricted Subsidiaries of in-kind obligations relating Subsidiary incurred in connection with any sale and leaseback transaction, provided the Attributable Debt with respect to net oil or natural gas balancing positions arising all sale and leaseback transactions in the ordinary course aggregate at any one time outstanding shall not exceed the greater of business(x) $25.0 million and (y) 2.5% of Consolidated Net Tangible Assets (determined at the time of incurrence of such Attributable Debt);
(13) any obligation 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 Company Partnership or any Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or 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; and
(15) the incurrence by the Company 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 Company 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 or Disqualified Stock issued pursuant to this clause (1518), not to exceed the greater of (ix) $75.0 million and (iiy) 5.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of 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 (1518) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Partnership 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement 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 DebtSection 4.09(b)(1). The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company Partnership as accrued to the extent required by the definition of such term. 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 incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Partnership 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:
(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 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 Company will Parent shall not, and will 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 Company will Parent shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Parent’s 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.08(a) will hereof shall 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 Issuers Company and the GuarantorsParent of the Notes and Note Guarantees (including any PIK or any increase in the principal amount of any Note as a result of any PIK Payments) 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);
(2) the incurrence by the Parent or any of its 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 (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Parent and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and 21.0 billion or (ii) $175.0 million plus 35.040% of the Company’s Adjusted Consolidated Net Tangible Assets determined on of the date of such incurrence;
(2) the incurrence by the Company Parent and its Restricted Subsidiaries (calculated at the time of such incurrence) and (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 Existing Indebtedness;
collateral securing Indebtedness under Credit Facilities contemplated by clause (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 incurrence by maximum potential liability of the Issuers Parent and the Guarantors of Indebtedness represented by the Notes its Restricted Subsidiaries thereunder) not to be issued on the date of this Indenture and the related Note Guaranteesexceed $4.0 billion;
(4) the incurrence by the Company 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 or cost of use, design, construction, installation or improvement of 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 Company Parent or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, extend, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a4.08(a) hereof or clauses clause (2), (3), (4), (5), (146), (13), (20), (21), (24) or (1525) of this Section 4.09(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 Company 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 Company and Parent and/or any of its Restricted Subsidiaries; provided, however, that:;
(A) if 8) the Company or issuance by any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries Parent to the Company Parent or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer shares 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)preferred stock;
(8) 9) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the Ordinary Course of Business;
(910) the Guarantee (including by way of co-obligation or assumption) by the Company Parent or any Restricted Subsidiary of its Restricted Subsidiaries the Parent of Indebtedness of the Company Parent or a Restricted Subsidiary of the Company 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 4.094.08; 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 guaranteedguaranteed or assumed;
(1011) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations (including reinsurance), 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 obligations to airport and governmental authorities);
(12) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations any overdrafts and related liabilities arising from treasury, depository and cash management services 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 connection with any automated clearing house transfers 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 businessfunds;
(1113) 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 incurrence by the Company Parent or any of its Restricted Subsidiaries for the acquisition cost of Indebtedness arising from any of the honoring by a bank or other financial institution of a checkforegoing, draft to finance any pre-delivery, progress or similar instrument inadvertently drawn against insufficient fundspayment or pursuant to a sale and lease-back) (whether in advance of or at any time following any acquisition of items being financed, so long as and whether such Indebtedness is covered within five Business Daysunsecured 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);
(1214) 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 incurrence 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 Company 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 of in-kind obligations relating to net oil Credit Card, travel charge or natural gas balancing positions arising clearing house processors in connection with Credit Card processing, travel charge or clearing house services incurred in the ordinary course Ordinary Course of businessBusiness, whether in the form of hold-backs or otherwise;
(1318) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Parent or to any obligation 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 Company Parent or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock a Subsidiary; provided that, in the case of a Restricted Subsidiary disposition, the maximum assumable liability in a transaction permitted 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 this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet of the Company Parent or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) Indebtedness of the Parent or any of its Restricted Subsidiaries 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 Ordinary Course of Business or (B) otherwise customary, typical or appropriate for a Permitted Acquisition Indebtedness; andBusiness;
(1524) the incurrence by the Company Parent or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated in right of 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 convertible into common stock of the issuance by Parent; provided that the Company of any Disqualified Stock in an aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not exceed $1.5 billion at any time outstanding; and
(25) the incurrence by the Parent or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of $3.0 billion, at any time outstanding.
(ic) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.094.08, in the event that 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 (1525) above, of Section 4.08(b) hereof or is entitled to be incurred pursuant to Section 4.09(a)4.08(a) hereof, the Company will Parent shall be permitted to divide, classify and reclassify all or a portion of such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.08; provided that the term “Existing Indebtedness” shall not include any Indebtedness that is permitted to be incurred under the Credit Agreement 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) or (3) of the definition of Permitted Debt. The Additionally, all or any portion of any item of Indebtedness may later be reclassified as having been incurred pursuant to Section 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 constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.08:
(1) the accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, preferred stock dividends;
(2) the accretion or amortization of original issue discount, ;
(3) the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, ;
(4) the reclassification of Preferred Stock preferred stock or Disqualified Stock any other instrument or transaction as Indebtedness due to a change in accounting principles, and principles or in GAAP; and
(5) the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an 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 or an issuance of Preferred Stock or Disqualified Stock for purposes denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.09; provided 4.08, the maximum amount of Indebtedness that the amount thereof shall be included in Fixed Charges Parent or any of the Company as accrued its Restricted Subsidiaries may incur pursuant to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.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 Company will shall not, and will 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 Company will shall 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 Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and Restricted Subsidiaries of the Company that are Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s '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, as the case may be, issued would have been at least 2.25 to 1.0, 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 the Disqualified such Preferred Stock or the Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions of the first paragraph of this Section 4.09(a) will 4.09 shall 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”"):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary that is a Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under pursuant to this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (iA) the Borrowing Base; and (B) $700.0 million and (ii) $175.0 million plus 35.0% 700,000,000 as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence minus (1) the aggregate amount of all Net Proceeds of Asset Sales required to be applied that are in fact applied by the Company or any of its Restricted Subsidiaries to repay permanently Indebtedness outstanding under one or more Credit Facilities (and to reduce commitments with respect thereto if the Indebtedness being repaid is revolving Indebtedness) pursuant to Section 4.10 hereof and (2) the aggregate amount of all repayments, optional or mandatory, of the principal of any such incurrenceadditional term Indebtedness (other than repayments that are concurrently reborrowed) that have actually been made since the date hereof;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture hereof and the related Note Exchange Notes to be issued pursuant to the Registration Rights Agreement (including, in each case, the Subsidiary Guarantees);
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 million and (ii) 3.0exceed, in aggregate principal amount at any one time outstanding, 5% of Total Assets on a pro forma basis (including a pro forma application of the Company’s Adjusted Consolidated Net Tangible Assets determined net proceeds of that Indebtedness), as of if that Indebtedness had been incurred on the date of such incurrence or issuancecalculation;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (14v) or (15xiii) of this Section 4.09(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 Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesWholly Owned Subsidiaries that are Guarantors; provided, however, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 NotesNotes and this Indenture, in the case of the Company, 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 Company or a Restricted Subsidiary any of the Company 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 Company or a Restricted Subsidiary any of the Company, will its Wholly Owned Subsidiaries that are Guarantors shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of (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 (B) hedging exposure to foreign currency fluctuations;
(9viii) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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;
(10ix) 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 in the form of additional shares of the same class of Disqualified Stock or 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, as the case may be, for purposes of this Section 4.09; provided, in each case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging performance 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;
(11xii) the incurrence by a Receivables Subsidiary of Indebtedness that is not recourse to 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 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 (other than with respect to Standard Securitization Undertakings) 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 IndebtednessQualified Receivables Transaction; and
(15xiii) 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 refinance or discharge replace any other Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xiii), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance50,000,000. 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 (1i) through (15xiii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.09, the Company will shall be permitted to divide, classify and reclassify such that item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding Facilities that are in existence on the date on which Notes are first issued and authenticated under this Indenture will initially shall be deemed to have been incurred on such that date in reliance on the exception provided by clause (1i) of the definition of 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
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 Company Issuer will not, and 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 Company Issuer 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 Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’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, as the case may be, would have been at least 2.25 2.0 to 1.0, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.08(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 Issuers Issuer and the Guarantors, any Guarantor of Indebtedness and letters of credit under any Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 10.0 million and (ii) $175.0 million plus 35.0% the maximum aggregate principal amount (or accreted value, as applicable) of the Company’s Adjusted Consolidated Net Tangible Assets determined on 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, can be incurred without the Priority Secured Leverage Ratio exceeding 0.40 to 1.00 (the greater of (i) and (ii), the “Priority Lien Cap”);
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and 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 GuaranteesIssue Date;
(4) the incurrence by the Company 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 or cost of design, construction, lease, installation or improvement of property, plant real or equipment personal property used or useful in the business of the Company Issuer or any of its Restricted Subsidiaries, or (y) with respect to assets that are acquired by the Issuer or any of its Restricted Subsidiaries in an aggregate principal amount outstandingconnection with the acquisition of restaurants, including from any of the Issuer’s or its Restricted Subsidiaries’ franchisees; provided that Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (4), 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 (4), shall not to exceed (i) the greater of (iA) $45.0 2.5 million and (B) 10.0% 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) 3.0% the amount of such Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations of the Company’s Adjusted Consolidated Net Tangible Assets determined as type 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 date of such incurrence or issuanceIssue Date, at any one time outstanding;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the Fixed Charge Coverage Ratio test set forth in Section 4.09(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 (1416), (17) or (1521) of this Section 4.09(b4.08(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyIssuer, 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 Company Issuer or a Restricted Subsidiary of the Company Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the Company, Issuer will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company Issuer or to any of its Restricted Subsidiaries of any 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 Issuer or a Restricted Subsidiary of the CompanyIssuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, 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 Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations not entered into for speculative purposes;
(9) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bid, plugging performance 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 businesseach case other than for an obligation for money borrowed);
(11) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness arising from agreements of 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 Issuer 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 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), so long as the principal amount of such Indebtedness does not exceed the gross proceeds actually received by the Issuer or any of its Restricted Subsidiary Subsidiaries in a transaction permitted connection with such transaction;
(12) the incurrence by this Indenturethe 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 such 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 incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business; provided that if such obligation instrument is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiaryhonored and drawn against insufficient funds, then such Indebtedness is covered within 10 Business Days;
(14) the incurrence by the Issuer or any Permitted Acquisition Indebtedness; andof its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Issuer or any of its Restricted Subsidiaries in the ordinary course of business;
(15) the incurrence by the Company 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, replace, defease or discharge any Indebtedness incurred pursuant to this clause (17), not to exceed 100% of the Net Proceeds received by the Issuer from the issuance or sale (other than to a Restricted Subsidiary of the Issuer) of its Capital Stock (other than Disqualified Stock or an Excluded Contribution) or otherwise contributed to the equity capital of the Issuer (other than through the issuance of Disqualified Stock or an Excluded Contribution), in each case, subsequent to the Issue Date; provided, however, that any such Net Proceeds that are so received or contributed shall not increase the amount available for making Restricted Payments to the extent the Issuer and its Restricted Subsidiaries incur Indebtedness in reliance thereon pursuant to this clause (17);
(18) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness to the extent the proceeds of such Indebtedness are deposited to defease or discharge the Notes and this Indenture as described under Articles 8 and 12 hereof;
(19) Indebtedness of the Issuer or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to a Credit 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
(21) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness or and the issuance by the Company of any 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 incurred or (but not Disqualified Stock issued or Preferred Stock) incurred pursuant to this clause (1521), not to exceed the greater $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 (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined Issuer or 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 date fact that the holders of such incurrence Indebtedness have entered into intercreditor agreements, collateral trust agreements or issuanceother arrangements giving one or more of such holders priority over the other holders in the collateral held by them. For purposes of determining compliance with this Section 4.094.08, 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 (1Sections 4.08(b)(1) through (154.08(b)(21) abovehereof, or is entitled to be incurred pursuant to Section 4.09(a)4.08(a) hereof, the Company Issuer will be permitted permitted, in its sole discretion, to divide, divide or classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide divide, classify or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.08 and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have treated as having been incurred on pursuant to one or more such date in reliance on the exception provided by clause (1clauses or pursuant to Section 4.08(a) of the definition of Permitted Debthereof. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.intere
Appears in 2 contracts
Sources: Indenture (Nathans Famous Inc), Indenture (Nathans Famous Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Company and its Restricted Subsidiaries thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.0% such amount as would not cause the Consolidated Senior Secured Leverage Ratio, calculated as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence, to exceed 3.0 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 the related Note GuaranteesIssue Date);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20) or (1526) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company 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;
4.09 and could have been incurred (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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of Person so Guaranteeing 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (Post Holdings, Inc.), Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’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, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers and the Guarantors, Issuer or any Restricted Subsidiary (whether as borrower or guarantor) of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 3.0 billion, (ii) the Borrowing Base and (iii) $175.0 500.0 million plus 35.030.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and 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 the related Note (c) any Guarantees;.
(4) the incurrence by the Company 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 or other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted SubsidiariesSubsidiaries (together with improvements, in an aggregate principal amount outstandingadditions, including all accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Permitted Refinancing Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 350.0 million and (iib) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of at the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case or Preferred Stock that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyIssuer, 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 Company Issuer or a Restricted Subsidiary of the Company Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company 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 Company Issuer or a Restricted Subsidiary of the CompanyIssuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, 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 Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer 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 guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed, and if the guarantee is by a Restricted Subsidiary that is not a Guarantor, the Indebtedness guaranteed could have otherwise been incurred by such Restricted Subsidiary under this Section 4.09;
(10) the incurrence by the Company Issuer 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 issued or provided by by, or for the Company account of, the Issuer or a Restricted Subsidiary in the ordinary course of business and any Guarantees guarantee or obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company Issuer 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 Issuer 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) the incurrence of any obligation arising from agreements of the Company Issuer or any Restricted Subsidiary of the Company Issuer providing for indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price, holdbacks, earn outs, 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 Issuer or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; andthe pledge of (or a Guaranty limited in recourse solely to) Equity Interests in an Unrestricted Subsidiary or Joint Venture held by the Issuer or a Restricted Subsidiary to secure Indebtedness of such Unrestricted Subsidiary or Joint Venture and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(15) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(16) the incurrence by the 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 and the Restricted Subsidiaries; and
(17) the incurrence by the Issuer or any Restricted Subsidiary of additional Indebtedness or the issuance by the Company Issuer of any Disqualified Stock or by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount, when taken together with the outstanding amount (or accreted value, as applicable) at any time outstanding, including of all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (1517), not to exceed the greater of (i) $75.0 350.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such 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 4.09. For purposes of determining compliance with this Section 4.09, in the event that 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 (1517) aboveof this Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company 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, or later redivide or reclassify all or a portion of such item of IndebtednessIndebtedness 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 4.09. ; provided that Indebtedness outstanding under the Credit Agreement outstanding Facilities on the date on which Notes are first issued and authenticated under of this Indenture will initially shall be deemed to have been considered incurred on such date in reliance on the exception provided by 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 definition 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 DebtRefinancing Indebtedness is denominated that is in effect on the date of such refinancing. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien or on the Notes 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, term 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 Section 4.09; provided that the amount thereof shall be is included in Fixed Charges of the Company 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 “amount” or “principal amount” of any Indebtedness or Preferred Stock or Disqualified Stock outstanding at any time of determination as of any date will beused herein shall be as set forth below or, if not set forth below, determined in accordance with GAAP:
(aA) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bB) the principal amount of the Indebtedness, in the case of any other Indebtedness; and;
(cC) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1i) the Fair Market Value of such assets at the date of determination; and
(2ii) 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 a Credit Facility and are being treated as incurred pursuant to clause (1) of Section 4.09(b) and the letters of 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 equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such 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 Company will not, and 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 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 Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Debt to Cash Flow 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 no greater than 6.0 to 1.01, 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.
(b) The provisions of Section 4.09(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”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuers Company and the Guarantors, any Subsidiary Guarantor of (A) additional Indebtedness and letters of credit under Credit Facilities in an Facilities, provided that giving effect to such incurrence, the aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its 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 (ix) $700.0 million and (ii) $175.0 million plus 35.0% 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of this Supplemental Indenture to repay any term Indebtedness or debt securities under Credit Facilities or to repay any revolving credit Indebtedness under Credit Facilities and effect a corresponding commitment reduction thereunder, in each case pursuant to Section 4.10 hereof (or, if the Merger has been consummated, $9.0 billion, without such incurrencedeductions) and (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 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 additional Indebtedness is permitted pursuant to any of the other provisions of this Section 4.10;
(2) the incurrence by the Company and its Restricted Subsidiaries of the any Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or cost of design, construction, installation or improvement of property, plant or equipment or the Capital Stock of any Person owning such assets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount 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 (4), not to exceed the greater of (i) $45.0 million and (ii) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as (or, if the Merger has been consummated, the greater of (x) $2.5 billion and (y) 5.0% of the date Company’s Total Assets), at the time of any such incurrence or issuancepursuant to this clause (4);
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15), (25) or (1526) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Subsidiary 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the Company, or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 CompanyCompany 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations (other than for speculative purposes);
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors 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 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 obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or bid, plugging and abandonment, appeal, reimbursement, performance, surety and injunctive relief bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations in the ordinary course of business 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 businessforegoing;
(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 inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business DaysDays 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 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, if the Merger is consummated, 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 in-kind obligations relating Indebtedness in respect of letters of credit required to net oil be issued on behalf of Royal Street in accordance with the Royal Street Agreements or natural gas balancing positions arising in the ordinary course of businessconnection with any Permitted Joint Venture Investment;
(13) any obligation arising from agreements of the incurrence by the Company or any of its Restricted Subsidiary 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 providing for indemnificationCompany’s Total Assets (or, adjustment if the Merger has been consummated, not to exceed $400.0 million) at the time 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 Subsidiaryincurrence;
(14) the incurrence by the Company or any Permitted Acquisition of its Restricted Subsidiaries of Contribution Indebtedness; and;
(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 issuance 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 Disqualified Stock 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, upon the drawing of 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 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, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1520), not to exceed the greater of (ix) $100.0 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;
(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;
(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 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 (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, replace, defease or discharge any Indebtedness incurred pursuant to this clause (26), does not exceed the greater of (x) $75.0 million and (iiy) 5.00.75% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of at the date time of such incurrence (or, if the Merger has been consummated, 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 issuancesuch 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 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 (1x) through (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 675.0 million and (iiy) $175.0 million plus 35.0% the Maximum Credit Facilities Cap as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence, in the case of clauses (x) and (y)(A) less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any Indebtedness under a term loan under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof provided that the guarantee by Laurel Technologies Partnership (d/b/a DRS Laurel Technologies), MSSC Company LP and Canopy Technologies LLC of additional Indebtedness and letters of credit under Credit Facilities shall be permitted by this clause (1) in the amount set forth in this Section 4.09(b)(1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Senior Subordinated Notes, the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, synthetic leases or the Attributable Debt with respect to sale and leaseback transactions, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 75.0 million and (ii) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (1412) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Subsidiary 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must guarantee shall be subordinated or pari passu, as applicable, 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 or bidobligations, plugging bankers’ acceptances, performance and abandonmentsurety bonds, 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 similar arrangements 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 Foreign Subsidiaries of in-kind obligations relating Indebtedness in an aggregate principal amount at any time outstanding pursuant to net oil this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or natural gas balancing positions arising replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (x) $40.0 million and (y) the Foreign Borrowing Base as of the date of such incurrence, (in the ordinary course case of business(x) and (y), or the equivalent thereof, measured at the time of each incurrence, in applicable foreign currency);
(13) 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 obligation such Indebtedness outstanding at any time under this clause (13), in excess of $35.0 million, 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 Section 4.09(a) hereof after giving effect to the incurrence of such Indebtedness pursuant to this clause (13);
(14) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, businesses or 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 SubsidiarySubsidiary otherwise permitted in accordance with this Indenture;
(1415) any Permitted Acquisition IndebtednessIndebtedness consisting of existing letters of credit issued prior to the date hereof issued for the account of (i) Integrated Defense Technologies, Inc. and/or its Subsidiaries, in an aggregate face amount not to exceed $5.0 million and (ii) ESSI and/or its Subsidiaries, in an aggregate face amount not to exceed $5.0 million; and
(1516) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary 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 defense or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance50.0 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 (1516) above, 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, 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 redivide or 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 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued 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 the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets an asset at the date of determination; , and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: First Supplemental Indenture (DRS Technologies Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Parent Entity and Company will not, and 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 Parent Entity and the Company will not and will not permit the Parent Entity to issue any Disqualified Stock and the Parent Entity and the Company will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if at the Fixed Charge Coverage Ratio for time (the Company’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 preferred stock is issued, as the case may be, the Fixed Charge Coverage Ratio on a consolidated basis of the Parent Entity, the Company and its Restricted Subsidiaries at the Calculation Time would have been at least 2.25 2.00 to 1.0, 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 the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter periodthe Parent Entity’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the Calculation Time.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $535.0 million (provided that Secured Hedging and Bank Product Obligations shall not be counted towards such amounts) less the greater aggregate amount of (i) $700.0 million all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the Issue Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceeffect a corresponding commitment reduction thereunder pursuant to Section 4.10 or Section 4.11 hereof;
(2) the incurrence by the Parent Entity, the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesGuarantees on the Issue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in each case incurred no later than 180 days after the date of such acquisition or the date of completion of such construction, installation or improvement, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 30.0 million and (ii) 3.06.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1514) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)) ;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 shall be subordinated or pari passu, as applicable, 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 or bidobligations, plugging bankers’ acceptances, performance and abandonmentsurety bonds, 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 similar arrangements in the ordinary course of business;
(11) the incurrence by the Company of Indebtedness, Guarantees or Obligations represented by or incurred pursuant to the Environmental Indemnity Agreements;
(12) Indebtedness of the Company or any of its Restricted Subsidiaries of Indebtedness Subsidiary 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, so long as provided that such Indebtedness is covered satisfied within five Business Days;
(12) the incurrence by the Company or any Days of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businessincurrence;
(13) any obligation Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company or any Parent Entity providing for indemnification, adjustment of purchase price, earn outs, out or other similar obligationsObligations, in each case, incurred or assumed in connection with the disposition acquisition or acquisition Disposition of any business, assets or Capital Stock of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on the face Indebtedness shall at no time exceed 20% of the balance sheet of gross proceeds actually received by the Company or any and its Restricted SubsidiarySubsidiaries in connection with a Disposition;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Parent Entity, 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 (1514), not to exceed the greater of (i) $75.0 25.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as Assets; and
(15) Acquired Debt of the date Company or any of its Restricted Subsidiaries incurred to finance or assumed in connection with the acquisition of any Person or assets; provided that either
(a) the Parent Entity, the Company and its Restricted Subsidiaries on a consolidated basis 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 of the Parent Entity, the Company and its Restricted Subsidiaries on a consolidated basis is greater than immediately prior to such acquisition or merger; or
(16) non-recourse Indebtedness in connection with a Permitted Receivables Financing; and
(17) Indebtedness of the Parent Entity, the Company or any Restricted Subsidiary in respect of cash management services entered into in the ordinary course of business and Guarantees of the Obligations of the Parent Entity, the Company and its Restricted Subsidiaries in respect of such incurrence indebtedness 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 issuancesuch 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 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 (1517) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrenceincurrence 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 redivide or 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 Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred on such date the Issue Date in reliance on the exception provided by clause (1) of the definition of “Permitted Debt. .” The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 Equity Interests 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued 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 the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; , and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Appvion, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) will hereof shall 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 Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $900.0 million less the aggregate amount of all (i) $700.0 million Secured Indebtedness incurred in reliance on Section 4.12(a)(1) and (ii) $175.0 million plus 35.0% Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of this Indenture to repay permanently any term Indebtedness under a Credit Facility or to repay permanently any revolving credit Indebtedness under a Credit Facility and effect a corresponding permanent commitment reduction thereunder pursuant to Section 4.10 hereof and (y) the maximum principal amount of Indebtedness that could be incurred such that after giving effect to such incurrence, the Secured Leverage Ratio of the Company would be no greater than 2.75 to 1.00 (calculated assuming all Indebtedness incurred under this clause (1) is secured and without netting the cash proceeds of any such Indebtedness);
(2) the incurrence by the Company and any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, economic development loans and purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an ; provided that the aggregate principal amount 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 (43), shall not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceTotal Assets;
(54) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1517) of this Section 4.09(b);
(65) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (76);
(8) 7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and entered into for bona fide hedging purposes (and not for speculative purposes) as determined in good faith by the Board of Directors or senior management of the Company;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(109) the incurrence Indebtedness incurred by the Company or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with 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 to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued 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 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; and
(15) 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 (15), not to exceed the greater without limitation letters of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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) credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness of another Person secured by a Lien on with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that either upon the assets of the specified Person, the lesser of:
(1) the Fair Market Value drawing of such assets at letters of credit or the date incurrence of determination; and
(2) the amount of the Indebtedness of the other Person.such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence or self-insurance;
Appears in 1 contract
Sources: Indenture (Patrick Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and 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 Company Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary of Parent may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyParent’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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided, further, that Restricted Subsidiaries of Parent that are not the Issuer or Subsidiary Guarantors and are not Foreign Subsidiaries may not incur Indebtedness or issue any shares of preferred stock if, after giving pro forma effect to such incurrence or issuance (including a pro forma application of the net proceeds therefrom), more than an aggregate of $25.0 million of Indebtedness or preferred stock of Restricted Subsidiaries of Parent that are not Guarantors would be outstanding pursuant to this Section 4.09(a) and Sections 4.09(b)(17) and (19) hereof at such time.
(b) The provisions of Section 4.09(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 Issuers Parent and the Guarantors, any Restricted Subsidiary of Parent of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Parent and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 630.0 million and minus (iiy) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of any amount used to permanently repay such incurrenceIndebtedness (or permanently reduce commitments with respect thereto) pursuant to Section 4.10 hereof;
(2) the incurrence by the Company Parent and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and the any Exchange Notes and related Note GuaranteesGuarantees issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness represented by incurred to finance the acquisition, development, construction, restoration, replacement, rebuilding, maintenance, upgrade or improvement of any fixed or capital assets, 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 or cost of designsuch development, construction, installation restoration, replacement, rebuilding, maintenance, upgrade or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariesimprovement, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ix) $45.0 30.0 million and (iiy) 3.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of the date of such incurrence or issuanceincurrence, at any one time outstanding;
(5) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (155) of this Section 4.09(b);
(6) the incurrence by the Company Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyIssuer, 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 Company Parent or a Restricted Subsidiary of the Company Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyParent’s Restricted Subsidiaries to the Company Parent or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Parent or a Restricted Subsidiary of the CompanyParent; and
(Bb) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business or incurred to hedge interest rate risk on floating rate indebtedness incurred in accordance with the terms of this Indenture;
(9) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries Guarantor of Indebtedness of the Company Issuer or a Guarantor and the guarantee by any Restricted Subsidiary that is not the Issuer or a Guarantor of Indebtedness of another Restricted Subsidiary that is not the Company Issuer or a Guarantor, in each case, 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 Company Parent or any of its Restricted Subsidiaries of Indebtedness in respect of letters of credit, bank guarantees, workers’ compensation health disability or other employee benefits claims, property, casualty or liability insurance or self-insurance obligations or bidobligations, plugging and abandonmentbankers’ acceptances, guarantees, performance, surety, statutory, appeal, reimbursementcompletion, performanceexport or import, 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 indemnities, customs, revenue bonds or obligations and workers’ compensation claims similar instruments in the ordinary course of business, including guarantees or obligations with respect thereto (in each case other than for an obligation for money borrowed); provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(11) the incurrence by the Company 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, or from any arrangement relating to the provision of treasury, depositary or cash management services, so long as such Indebtedness is covered within five Business Days10 business days;
(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 of Foreign Subsidiaries incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (12), not to exceed $2.5 million (or the Company equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency);
(13) the incurrence by Parent or its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, incurred in connection with the disposition of any business, assets or Restricted Subsidiary of Parent (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);
(14) the incurrence by Parent or any of its Restricted Subsidiaries of in-kind obligations relating to net oil Indebtedness arising in connection with endorsement of instruments for collection or natural gas balancing positions arising deposit 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; and
(15) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness consisting of obligations to pay insurance premiums in an amount not to exceed the Company annual premiums in respect of such insurance premiums at any one time outstanding;
(16) Indebtedness of Parent or any of its Restricted Subsidiaries the proceeds of which are applied to defease or discharge the Notes pursuant to Articles 8 or 11 hereof;
(17) Acquired Debt incurred by a Restricted Subsidiary prior to the time that such Restricted Subsidiary was acquired by or merged into Parent and was not incurred in connection with, or in contemplation of, such acquisition or merger in an aggregate amount not to exceed $20.0 million at any time outstanding;
(18) Indebtedness of Parent or any of its Restricted Subsidiaries to the seller of any business or assets permitted to be acquired by the Parent and its Restricted Subsidiaries under this Indentrue constituting a portion of the purchase price therefor in an aggregate amount not exceeding $15.0 million at anytime outstanding; and
(19) the incurrence by Parent or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of any Disqualified Stock of Parent or any of its Restricted Subsidiaries or preferred stock of Parent or any of its Restricted Subsidiaries 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 (1519), not to exceed the greater of (ix) $75.0 40.0 million and (iiy) 5.04.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of incurrence, at any one time outstanding. Parent will not incur, and will not permit the Issuer or any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the date Issuer or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence 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 Parent solely by virtue of being unsecured or issuanceby 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 (1519) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. ; provided that Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture 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 or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be included in Fixed Charges of Parent as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the Company 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 incurred or, in the case of a revolving credit commitment, the date on which the commitment is first made. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that Parent or any Restricted Subsidiary of Parent may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as accrued to the extent required by the definition a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets at the date of determination; and
(2b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Partnership will not, and 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 Company Partnership will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyPartnership’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, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Partnership and the GuarantorsRestricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Partnership and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 850.0 million, (ii) $175.0 million plus 35.0the Borrowing Base in effect under the Credit Agreement at such time, and (iii) 32.5% of the CompanyPartnership’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company Partnership or any of its Restricted Subsidiaries or any Disqualified Stock of the CompanyPartnership, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (1413) or (15) of this Section 4.09(b);
(65) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not the Company Partnership 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 CompanyPartnership, 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 Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company 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 Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, 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 (76);
(8) 7) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness of the Company Partnership or a Restricted Subsidiary of the Company Partnership 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;
(109) the incurrence by the Company Partnership 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 Partnership 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 businessbusiness or as required by requirements of law or governmental authorities;
(1110) the incurrence by the Company Partnership 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 ten Business Days;
(1211) the incurrence by the Company Partnership 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;
(1312) any obligation arising from agreements of the Company Partnership or any Restricted Subsidiary of the Company Partnership 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 Partnership or any Restricted Subsidiary;
(1413) any Permitted Acquisition Indebtedness; and;
(14) the incurrence by the Partnership 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;
(15) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company 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 to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 125.0 million and (ii) 5.06.0% of the CompanyPartnership’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance; and
(16) 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. 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 (1516) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company Partnership 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on or prior to the date on which Notes are first issued and authenticated under this Indenture 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 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company Partnership as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person. For purposes of determining compliance with any 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 case of revolving credit debt, the date such Indebtedness was first committed or first incurred (whichever yields the lower U.S. dollar equivalent)); provided that if such Indebtedness is incurred or Disqualified Stock or Preferred Stock is issued to refinance other Indebtedness, 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 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 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. 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 exceeded to the extent the principal amount of such newly incurred Indebtedness, the liquidation preference of such newly issued Disqualified Stock or the amount of such newly issued Preferred Stock does not exceed the sum of (i) the principal amount of such Indebtedness, the liquidation preference of such Disqualified Stock or the amount of such Preferred Stock being refinanced, extended, replaced, refunded, renewed or defeased, (ii) any 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 and (iii) 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 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.
Appears in 1 contract
Sources: Indenture (Sitio Royalties Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company ▇▇▇▇▇▇▇ will not, and 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 Company Issuer and ▇▇▇▇▇▇▇ will not issue any preferred stock or Disqualified Stock Stock, respectively, and ▇▇▇▇▇▇▇ will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers ▇▇▇▇▇▇▇ may incur Incur Indebtedness (including Acquired Debt) or issue preferred stock or Disqualified Stock, and the Issuer and the Subsidiary Guarantors may incur Incur Indebtedness (including Acquired Debt) or issue Preferred preferred stock or Disqualified Stock, if 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 Incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Paragraph (a) of this Section 4.09(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 or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities 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 Company ▇▇▇▇▇▇▇ and its Restricted Subsidiaries thereunder) not to exceed the greater of:
(A) Cdn$300 million, less the aggregate amount of all Net Proceeds of Asset Sales that have been applied by ▇▇▇▇▇▇▇ or any of its Restricted Subsidiaries since the Issue Date to permanently repay any term Indebtedness under a Credit Facility pursuant to Section 4.10 hereof and less the aggregate amount of all commitment reductions with respect to any revolving credit borrowings under a Credit Facility that have been made by ▇▇▇▇▇▇▇ 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
(iB) $700.0 million and (ii) $175.0 Cdn$150 million plus 35.030% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the last day of the fiscal quarter for which internal financial statements are available immediately preceding the date of on which such incurrenceIndebtedness is Incurred;
(2) the incurrence by the Company and its Restricted Subsidiaries Existing Indebtedness (other than Indebtedness described under clause (1), (3) or (6) of the Existing Indebtednessthis Section 4.09(b));
(3) the incurrence by the Issuers Notes and the Guarantors of Indebtedness represented by the Notes related Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) 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 Incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiariessuch Guarantor, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred Incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 US$25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred Incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company ▇▇▇▇▇▇▇ and any of its Restricted Subsidiaries, including the intercompany Indebtedness referred to in the last sentence of the definition of “Existing Indebtedness”; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 CompanyIssuer, 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 Company ▇▇▇▇▇▇▇ or a Restricted Subsidiary of the Company ▇▇▇▇▇▇▇ and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company ▇▇▇▇▇▇▇ or a Restricted Subsidiary of the Company▇▇▇▇▇▇▇, will ▇▇▇▇ be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company ▇▇▇▇▇▇▇ 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 issuance by any ordinary course 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 business and 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)for speculative purposes;
(8) the incurrence guarantee by the Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of ▇▇▇▇▇▇▇ or the Company Issuer or a another Restricted Subsidiary of the Company to the extent ▇▇▇▇▇▇▇ that the guaranteed Indebtedness was permitted to be incurred Incurred by another provision of this Section 4.09; provided that if ;
(9) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated or pari passu, as applicable, to payment of dividends on Disqualified Stock in the form of additional shares of the same extent class of Disqualified Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of ▇▇▇▇▇▇▇ as the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations or bidand Obligations under Oil and Gas Hedging Contracts, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary that such Contracts were entered into 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 businessnot for speculative purposes;
(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 in-kind obligations relating to net oil or natural gas balancing positions production imbalances arising in the ordinary course of business;
(1312) any obligation arising from agreements standby letters of the Company credit, guarantees, performance or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, surety bond or similar other reimbursement obligations, in each case, incurred or assumed issued in the ordinary course of business and not in connection with the disposition borrowing of money or acquisition the obtaining of any businessan 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, assets and other than the extension of credit represented by such letter of credit, guarantee 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 performance or any Restricted Subsidiarysurety bond itself);
(1413) any Permitted Acquisition Indebtedness; and
(15) 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 Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued Incurred pursuant to this clause (1513), not to exceed US$30.0 million;
(14) Indebtedness of Compton or the greater Issuer to the extent that the net proceeds thereof are promptly (A) used to purchase Notes tendered in a Change of Control Offer or (iB) $75.0 million deposited to defease or to satisfy and discharge the Notes; and
(ii15) 5.0% Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Company’s Adjusted Consolidated Net Tangible Assets determined ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days after receipt of notice of its Incurrence by the Issuer or Guarantor, as of the date of such incurrence or issuanceapplicable. 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 (15) above, or is entitled to be incurred Incurred pursuant to Section 4.09(a), ▇▇▇▇▇▇▇ or the Company applicable Restricted Subsidiary will be permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, in whole or later redivide or reclassify all or a portion of such item of Indebtedness, in part in any manner that complies with the applicable part of this Section 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 reclassification. Notwithstanding the foregoing, Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Issue Date will initially be deemed to have been incurred Incurred on such date in reliance on the exception provided by clause (1) of the definition this Section 4.09(b). Notwithstanding any other provision of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsthis Section 4.09, the accretion or amortization maximum amount 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 that may be Incurred pursuant 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 this Section 4.09 will not be deemed to be an incurrence of exceeded with respect to any outstanding Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued due solely to the extent required by the definition result of such term. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, fluctuations 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; andcurrency exchange rates.
(c) Neither ▇▇▇▇▇▇▇ nor the Issuer will Incur any additional Indebtedness (including Permitted Debt) that is contractually subordinated in respect right of payment to any other Indebtedness of another Person secured by a Lien ▇▇▇▇▇▇▇ or the Issuer, respectively, unless such additional Indebtedness is also contractually subordinated in right of payment to the Parent Guarantee or the Notes, as applicable, on substantially identical terms. Neither ▇▇▇▇▇▇▇ nor the assets 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 specified Personforegoing, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; and
(2) the amount of the no Indebtedness of the Issuer or any Guarantor will be deemed to be contractually subordinated in right of payment to any other PersonIndebtedness 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 Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock), and the Guarantors Company may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s '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, as the case may be, issued would have been at least 2.25 2.50 to 1.01.00 (if such incurrence occurs during the period from the Issue Date to the third anniversary of the Issue Date) and 2.75 to 1.00 (if such incurrence occurs after the third anniversary of the Issue Date), 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 been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(aSo long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, paragraph (a) will above shall 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 Issuers Company and the Guarantors, its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities in an Facilities; provided, however, that the aggregate principal amount at any one time of all Indebtedness outstanding under this clause (1) all Credit Facilities after giving effect to such incurrence (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) does not exceed an amount equal to exceed $75.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Subsidiaries since the date of such incurrenceIssue Date to repay Indebtedness under a Credit Facility pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Subsidiary Guarantees;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a4.9(a) above or clauses (2), (3), (4), (5), (14) or (1511) of this Section 4.09(bparagraph (b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 Company, 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 Company or a Wholly Owned Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
Obligations under or with respect to (9a) Interest Rate Agreements not for the Guarantee by the Company or any purpose 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;
speculation and (10b) 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 Currency Agreements entered into in the ordinary course of business and any Guarantees or letters not for the purpose of credit functioning as or supporting any speculation;
(8) Indebtedness of the foregoing Company or any Restricted Subsidiary in respect of performance bonds and surety or obligations appeal bonds entered into by the Company and workers’ compensation claims the Restricted Subsidiaries in the ordinary course of their business;
(119) the incurrence by Indebtedness of the Company or any of its Restricted Subsidiaries of Indebtedness Subsidiary 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 fundsfunds in the ordinary course of business, so long as provided that such Indebtedness is covered satisfied within five Business Daysthree business days of incurrence;
(1210) the incurrence Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 Indebtedness of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment that was permitted to be incurred by another provision 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 SubsidiarySection 4.9;
(14) any Permitted Acquisition Indebtedness; and
(1511) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1511), not to exceed $25.0 million;
(12) the greater incurrence by the Company's Unrestricted Subsidiaries of (i) $75.0 million and (ii) 5.0% Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company that was not permitted by this clause (12); and
(13) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the date same class of Disqualified Stock; provided, in each such incurrence or issuancecase, that the amount thereof is included in Fixed Charges of the Company as accrued. For purposes of determining compliance with this Section 4.094.9, 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 (1513) of paragraph (b) above, or is entitled to be incurred pursuant to paragraph (a) of this Section 4.09(a)4.9, 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 portion of such item of Indebtedness, incurrence 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person4.9.
Appears in 1 contract
Sources: Indenture (Caraustar Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and 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 Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that (i) the Issuers Issuer and any Restricted Subsidiary of the Issuer other than Warner Music and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified 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 would have been at least 2.0 to 1 and the Guarantors (ii) Warner Music and any Restricted Subsidiary of Warner Music may incur Indebtedness (including Acquired Debt) or and any Restricted Subsidiary may issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio for the CompanyWarner Music’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, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 or the Disqualified Stock or the 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.
(b) Section 4.09(a4.10(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 existence of Indebtedness under the Credit Agreement together with the incurrence by of the Issuers guarantees thereunder and the Guarantors, issuance and creation of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) 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 $1,550.0 million outstanding at any one time, less the Company amount of all mandatory principal payments (with respect to revolving borrowings and its Restricted Subsidiaries thereunderletters of credit, only to the extent revolving commitments are correspondingly reduced) not to exceed actually made by the greater borrower thereunder in respect of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Indebtedness thereunder with Net Tangible Assets determined on the date of such incurrenceProceeds from Asset Sales;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital (x) the Securities (including any Guarantee) issued on the Issue Date and (y) Additional Senior PIK Securities issued from time to time in payment of accrued interest on the Senior PIK Securities;
(3) Existing Indebtedness (other than Indebtedness described in clauses (1) and (2) of this Section 4.10(b));
(4) Indebtedness (including Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, ) incurred for by the purpose of financing all Issuer or any part of Restricted Subsidiary to finance the purchase price or cost of designpurchase, construction, installation lease or improvement of property, plant property (real or personal) or equipment that is used or useful in a Permitted Business (whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted Subsidiaries, Person owning such assets) in an aggregate principal amount outstandingthat, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness then outstanding and incurred pursuant to this clause (4), does not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence Indebtedness incurred by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Subsidiary constituting reimbursement obligations with respect to the Notes, in the case of the 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-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;
(116) 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 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 Issuer or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition 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 (A) such Indebtedness is not reflected on the balance sheet of the Issuer 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 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 any Restricted Subsidiaries in connection with such disposition;
(7) Indebtedness of the Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Issuer or any Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Issuer or a Restricted Subsidiary) 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 in issued to the Issuer or a transaction permitted by this IndentureRestricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such obligation 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 Preferred Stock;
(9) Hedging Obligations of the 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 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 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 Restricted Subsidiary 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;
(13) the incurrence by the Issuer or any Restricted Subsidiary of Indebtedness 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 any Indebtedness issued to so refund or refinance such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred which is not reflected as a liability on less than the face remaining Weighted Average Life to Maturity of the balance sheet Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness subordinated or pari passu to the Securities, such Refinancing Indebtedness is subordinated or pari passu to the Securities at least to the same extent as the Indebtedness being refinanced or refunded, (C) shall not include (x) to the extent applicable, Indebtedness or Preferred Stock of a Subsidiary that is not a Guarantor that refinances Indebtedness or Preferred Stock of the Company Issuer or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary 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 the Stated Maturity of the Indebtedness being refunded or refinanced; and provided, further, that subclauses (A), (B) and (E) of this clause (13) will not apply to any refunding or refinancing of Bank Debt or Indebtedness of a Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence Indebtedness or Preferred Stock of Persons that are acquired by the Company 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 such incurrence of Indebtedness either (A) (i) in the case of Indebtedness of the Issuer or any of its Restricted Subsidiaries other than Warner Music and its Restricted Subsidiaries, the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to clause (i) of Section 4.10(a) and (ii) in the case of Indebtedness of Warner Music or any of its Restricted Subsidiaries, Warner Music would be permitted to incur at least $1.00 of additional Indebtedness pursuant to clause (ii) of Section 4.10(a) or (B) the issuance Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(15) Indebtedness arising from the honoring by a bank or financial institution of a check, draft or similar instrument drawn against insufficient funds in the Company ordinary course of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(16) Indebtedness of the Issuer or any Disqualified Stock Restricted Subsidiary of the Issuer supported by a letter of credit issued pursuant to the Credit Agreement in an 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) (1) in the case of Foreign Subsidiaries of the Issuer that are not Subsidiaries of Warner Music, if the Issuer or any of its Restricted Subsidiaries other than Warner Music and its Restricted Subsidiaries could incur $1.00 of additional Indebtedness pursuant to clause (i) of Section 4.10(a) and (2) in the case of Foreign Subsidiaries of Warner Music, if Warner Music or any of its Restricted Subsidiaries could incur $1.00 of additional Indebtedness pursuant to clause (ii) of Section 4.10(a) after giving effect to such borrowing, Indebtedness of such Foreign Subsidiaries not otherwise permitted hereunder or (b) if neither the Issuer nor Warner Music 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 or Warner Music, as the case may be, incurred for working capital purposes; provided, however, that the aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing of Indebtedness incurred to renewunder this clause (20) which, refund, refinance, replace, defease or discharge any when aggregated with the principal amount of all other Indebtedness then outstanding and incurred or Disqualified Stock issued pursuant to this clause (1520), does not to exceed the greater of (ix) $75.0 100.0 million and (iiy) 5.010% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date Foreign Subsidiaries; and
(21) Indebtedness consisting of such incurrence promissory notes issued by the Issuer to current or issuance. former officers, directors and employees or their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Issuer or Parent permitted by Section 4.11.
(c) For purposes of determining compliance with this Section 4.094.10, 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 (1521) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company Issuer will be permitted to divide, classify and later reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant, and such item of Indebtedness will be treated as having been incurred pursuant to only one of such categories. Accrual of interest, the accretion of accreted value (including of the Discount Securities) and the payment of interest in the form of additional Indebtedness (including the issuance of Additional Senior PIK Securities in payment of interest on the Senior PIK Securities) 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 on which Notes Securities 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” in Section 4.10(b) and the Issuer shall not be permitted to reclassify all or any portion of such Indebtedness. The accrual maximum amount of interest or Preferred Stock or Disqualified Stock dividends or distributions, Indebtedness that 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 Issuer and its Restricted Subsidiaries may incur pursuant 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 this covenant shall 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 shall be included in Fixed Charges of the Company as accrued exceeded, with respect to 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, solely as a result of fluctuations in the case exchange rate 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 of determination; and
(2) the amount of the Indebtedness of the other Personcurrencies.
Appears in 1 contract
Sources: Indenture (Warner Music Group Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Company and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred 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.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have a principal amount equal be incurred pursuant to the maximum potential liability another clause of the Company and its Restricted Subsidiaries thereunderdefinition of Permitted Debt or clause (a) above as a result of reclassification) not to exceed the greater of (ix) $700.0 1,500.0 million and (iiy) $175.0 million plus 35.0% such amount as would not cause the Consolidated Senior Secured Leverage Ratio, calculated as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence, to exceed 3.5 to 1.0 and (b) any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of the definition of Permitted Debt or clause (a) above as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and Subsidiary Guarantees to be issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.04.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1417), (18), (20), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company 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 and could have been incurred (in compliance with this Section 4.09; provided that if ) by 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 guaranteedPerson so Guaranteeing such Indebtedness;
(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 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;
(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 (except in the case of daylight overdrafts) drawn against insufficient fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(1211) 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 of in-kind obligations relating to net oil or natural gas balancing positions arising 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;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary 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) any Permitted Acquisition 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; and, 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 additional 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 or and/or the issuance guarantee by the Company and/or any of any Disqualified Stock 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1517), not to exceed the greater of (ia) $75.0 300.0 million and (iib) 5.04.0% of the Company’s Adjusted Consolidated Net Tangible 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 issuance(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 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 (1527) 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, incurrence (or later redivide reclassify such Indebtedness in whole or reclassify all or a portion of such item of Indebtedness, in part) in any manner that complies with this Section 4.09. Indebtedness under In addition, the Credit Agreement 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be treated as 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Post Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors Company’s Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and any Guarantor of the Guarantors, Notes to be issued on the date of this Indenture and any other additional Indebtedness and letters of credit under Credit Facilities (and reimbursement obligations with respect thereto) that will constitute Priority Lien Debt, and any Permitted Refinancing Indebtedness that does not constitute Priority Lien Debt and that is incurred to renew, refund, refinance, replace, defease, extend or discharge any other Indebtedness incurred pursuant to this clause (1), in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) any Guarantor thereunder and including all other Priority Lien Debt that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrencePriority Lien Cap;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and any Indebtedness that is incurred pursuant to a commitment in existence as of date of this Indenture;
(3) the incurrence by the Issuers Company and any Guarantor 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 Guarantors maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $1.75 billion and (B) Indebtedness represented 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 Notes to be issued on the date collateral securing Indebtedness under Credit Facilities contemplated by clause (A) of this Indenture 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 maximum potential liability of the Company and the related Note Guaranteesits Restricted Subsidiaries thereunder) not to exceed $1.5 billion; provided that no Indebtedness or letters of credit incurred pursuant to this clause (3) is secured by a Lien on any property or asset that constitutes Collateral;
(4) the incurrence by the Company 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 Company for) all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment (including without limitation airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any ; provided that no Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence is secured by a Lien on any property or issuanceasset that constitutes Collateral;
(5) the incurrence by the Company 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, replace, extend, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (146), (13), (20), (21), (24) or (1525) of this Section 4.09(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 Company 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 Company 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 Company or a Restricted Subsidiary of the Company, or into which the Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the Company and becomes a Restricted Subsidiary of the Company;
(7) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each casecase under this clause (B), to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee guarantee by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company 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;
(1011) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations, 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 obligations to airport and governmental authorities);
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of selfany 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 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;
(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 Company issued to such director, consultant, manager, officer or employee in an aggregate principal amount not to exceed $5.0 million in any 12-insurance month period or (b) pursuant to any deferred compensation plan approved by the Board of Directors of the Company;
(15) reimbursement obligations in respect of standby or bid, plugging and abandonment, appeal, reimbursement, performance, documentary letters of credit or banker’s acceptances that are not secured by Liens on any property or asset that constitutes Collateral;
(16) surety and similar appeal bonds that are not secured by Liens on any property or asset that constitutes Collateral and completion guarantees provided by that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Company or a any of its Restricted Subsidiary Subsidiaries to credit card processors in connection with credit card processing services incurred in the ordinary course of business of the Company and its Restricted Subsidiaries;
(18) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Company or to any Guarantees other Subsidiary of the Company or letters their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any other Subsidiary of credit functioning as the Company, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Company or supporting any of its Restricted Subsidiaries owed to one or more Persons in connection with the foregoing bonds or obligations and workers’ compensation claims financing of insurance premiums in the ordinary course of business;
(1120) the incurrence of obligations under the Co-Branded Agreement and the Debit Card Marketing Agreement, in each case to the extent such obligations may be deemed to constitute Indebtedness of the Company or any of its Restricted Subsidiaries;
(21) the incurrence by the Company and any Guarantor of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) that will constitute Junior Lien Debt (including the Flyer Miles Obligations), 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 (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 Company and any Guarantor thereunder and including all other Junior Lien Debt that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed the Subordinated Lien Cap;
(22) Indebtedness arising from agreements of 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 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, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) any Permitted Acquisition Indebtedness; andIndebtedness of the Company 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 Company;
(1524) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and the Note Guarantees on terms not materially less favorable to Holders of Notes than those customary at the time of incurrence (determined in good faith by a senior financial officer of the Company) for senior subordinated “high yield” debt securities or (B) unsecured, pari passu with all Obligations with respect to the issuance by Notes and the Company Note Guarantees and convertible into common stock of any Disqualified Stock in an the Company; provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not to exceed $500.0 million at any time outstanding; and
(25) the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) above, or is entitled to be incurred pursuant to Section 4.09(a), by the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date or any of its incurrence, or later redivide or reclassify all or a portion Restricted Subsidiaries of such item of Indebtedness, in any manner additional Indebtedness 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 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. 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 is not secured by a Lien on any property or asset that constitutes Collateral in the form of additional an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness with the same termsincurred to renew, the reclassification of Preferred Stock refund, refinance, replace, extend, defease 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of discharge 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 of determination; and
(2) the amount of the Indebtedness of the other Person.incurred pursuant to this clause
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will OI Group shall not, and will 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 Company will OI Group shall not issue any Disqualified Stock and will OI Group shall not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers OI Group and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or and may issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyOI 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 such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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 preferred stock has been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.13 shall 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 Issuers and the Guarantors, OI Group or its Restricted Subsidiaries of Indebtedness and letters of credit under Credit Facilities (and the incurrence 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 Company OBGC and its Restricted Subsidiaries thereunder) not to exceed $4.5 billion (of which not more than $3.0 billion of such Indebtedness shall be incurred by Restricted Subsidiaries (for the greater avoidance of (i) $700.0 million and (ii) $175.0 million plus 35.0% of doubt, other than the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence) that are not Guarantors);
(2) the incurrence by the Company OI Group and its any Restricted Subsidiaries Subsidiary of the OI Group of Existing Indebtedness;
(3) the incurrence by OI Group, the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be and the related Guarantees issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company 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 design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5) the incurrence by OI Group or any of its Restricted Subsidiaries of Indebtedness incurred to finance all or any part of the Company purchase price or cost of construction or improvement of property, plant or equipment used in the business of 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 renew, refund, refinance, replace, defease refinance or discharge any replace Indebtedness (other than intercompany Intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.13 or clauses (2), (3), (4), (5), (146) or (157) of this Section 4.09(b)paragraph;
(6) 8) the incurrence by the Company OI Group or any of its Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Company 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:
(Aa) if OI Group, the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 Company, or the Note GuaranteeGuarantees of the Notes, in the case of OI Group or a Guarantor;
(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
(B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company OI Group or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company OI Group or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company OI Group or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) 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 Company OI Group or any of its Restricted Subsidiaries of Hedging Obligations;
(910) provided that 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 an aggregate principal amount (or accreted value, as applicable) at any time outstanding, not to exceed $300.0 million;
(11) (i) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company OI Group or a any Restricted Subsidiary of OI Group and (ii) the Guarantee by any Foreign Subsidiary other than the Company to the extent of Indebtedness of OI Group or any Restricted Subsidiary of OI Group, in each case, 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 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 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;
(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 Days4.13;
(12) the incurrence by accrual of interest, the Company accretion or amortization of original issue discount, the payment of interest on any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising Indebtedness in the ordinary course form of businessadditional 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 shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.13 or an issuance of Disqualified Stock; provided, in each such case, that the amount thereof is included in Fixed Charges of OI Group as accrued;
(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; and
(15) the incurrence by the Company OI Group 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1513), not to exceed $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 greater 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) $75.0 million 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) 5.0the 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 OI Group or any of its Restricted Subsidiaries of Acquired Debt, 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 (18), not to exceed 10.0% of Tangible Assets, as measured after giving effect to the Company’s Adjusted Consolidated Net Tangible Assets determined as transaction for which the Acquired Debt was incurred. The Company shall not incur any Indebtedness (including Permitted Debt) after the Issue Date that is contractually subordinated in right of payment to any other Indebtedness of the date Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially similar terms; provided, however, that no Indebtedness of the 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 incurrence Indebtedness is also contractually subordinated in right of payment to the obligations under the Notes or issuanceGuarantees of the Notes on substantially similar terms; provided, however, that no Indebtedness of OI Group or the Guarantors shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of OI Group or the Guarantors solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.094.13, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.13, the Company will shall be permitted to divide, divide and classify and reclassify such item of Indebtedness on the date of its incurrenceincurrence in any manner that complies with this Section 4.13, or later redivide or 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 Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially Issue Date shall 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 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other PersonDebt above.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and 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 Company Parent will not issue any Disqualified Stock and will not permit any of its the Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuers may incur Parent will be entitled to Incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors may incur any Restricted Subsidiary will be entitled to Incur Indebtedness (including Acquired Debt) or issue Preferred StockStock if, if on the date of such Incurrence or issuance and after giving effect thereto on a pro forma basis, 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 or such Preferred Stock is issued, as the case may be, would have been be at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding Section 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 or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) (A) Indebtedness Incurred pursuant to the incurrence by Credit Agreement; provided, however, that, immediately after giving effect to any such Incurrence, the Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding of all Indebtedness Incurred under this clause (1) (and then outstanding, together with letters of credit being deemed to have a $1.2 billion aggregate principal amount equal to 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 maximum potential liability of “Additional 2027 Secured Notes”) issued in the Company Transactions and its Restricted Subsidiaries thereunderany Refinancing Indebtedness in respect thereof, does not exceed $5.6 billion; provided, that (B) not to exceed the greater of after all amounts have been Incurred under clause (1)(A), (i) $700.0 million 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) $175.0 million plus 35.0% 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 Company’s Adjusted Consolidated Net Tangible Assets determined on the date Incurrence of such incurrenceFirst Lien Secured Obligations);
(2) the incurrence Indebtedness owed to and held by the Company and its Parent or a Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (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 Company Parent or a Restricted Subsidiary of the Company and (ii) any sale or other subsequent transfer of any such Indebtedness (other than to a Person that is not either the Company Parent or a Restricted Subsidiary of the Company, will Subsidiary) shall be deemed, in each case, to constitute an incurrence the Incurrence of such Indebtedness by the Company 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) Swap Obligations directly related to Indebtedness permitted to be Incurred by the issuance by any of Parent and the Company’s Restricted Subsidiaries pursuant to this Indenture or entered into in the Company or to any ordinary course 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 business and 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)for speculative purposes;
(8) the incurrence 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 Company Parent or any Restricted Subsidiary and (ii) trade letters of 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 Parent or any of its Restricted Subsidiaries of Hedging ObligationsSubsidiaries;
(9) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft, credit card, purchase card or similar instrument drawn against insufficient funds and similar liabilities in the ordinary course of business or consistent with industry practice or other treasury, depositary and cash management services in the ordinary course of business or consistent with industry practice; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten business days of notification to the 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 Guarantee by (i) the Company Issuers or a Guarantor of Indebtedness or other Obligations of the Parent or any of its the Restricted Subsidiaries of Indebtedness of the Company or Subsidiaries, (ii) a Foreign Restricted Subsidiary of Indebtedness or other Obligations of another Foreign Restricted Subsidiary or (iii) a Non-Guarantor Subsidiary (other than the Company to Issuers) of Indebtedness or other Obligations of another Non-Guarantor Subsidiary (other than the extent that Issuers), in each case so long as the Incurrence of such guaranteed Indebtedness was or other obligations by the Parent or such Restricted Subsidiary is permitted to be incurred by another provision under the terms of this Section 4.09Indenture; provided that 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;
(1011) (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount on the incurrence by date of Incurrence that, when taken together with the Company 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 its the Restricted Subsidiaries consisting of Indebtedness (i) the financing of insurance premiums with the providers of such insurance or their affiliates, (ii) take-or-pay obligations contained in respect of self-insurance obligations supply agreements or bid(iii) customer deposits and advance payments received from customers for goods and services purchased, plugging and abandonmentin each case, 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;
(1115) Indebtedness of the incurrence Parent or any of the Restricted Subsidiaries supported by a letter of credit issued pursuant to the Company 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 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 DaysSubsidiaries;
(1221) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees of the incurrence by the Company Parent or any of its Restricted Subsidiaries Subsidiaries, their respective estates, spouses or former spouses with respect to the cancellation, purchase or redemption of in-kind obligations relating Equity Interests of the Parent or any of its Subsidiaries, to net oil or natural gas balancing positions arising in the ordinary course of businessextent permitted under Section 4.07(b)(5);
(1322) any obligation arising from agreements Indebtedness of the Company Issuers or a Guarantor incurred in connection with or in contemplation of, or to provide all or any Restricted Subsidiary portion of the Company providing for indemnificationfunds or credit support utilized to consummate, adjustment 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 price, earn outsof assets or the purchase of Capital Stock of, or similar obligationsmerger 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, 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 plus 100% of the balance sheet of the Company or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence net proceeds received by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Parent from the issuance by the Company or sale of Equity Interests (other than Disqualified Stock), and 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 in respect of such Indebtedness incurred or Disqualified Stock issued Incurred pursuant to this clause (1525), not ; and
(26) Indebtedness Incurred pursuant to exceed the greater of a Permitted Receivables Facility.
(ic) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 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 portion thereof) meets the criteria of more than one of the categories types of Permitted Debt Indebtedness described in Section 4.09(b), the Issuers, in their sole discretion, will 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 (12) through (1526) above, or is entitled to of Section 4.09(b) may later be incurred 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 Company case may be, if it were Incurred at the time of such reclassification);
(3) the Issuers will be permitted entitled to divide, divide and classify and reclassify such an item of Indebtedness on in more than one of the date types of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, Indebtedness described in any manner that complies with this Section 4.09. ;
(4) with respect to Indebtedness permitted under the Credit Agreement outstanding Section 4.09(b)(4) in respect of Sale Leaseback Transactions that were not Capital Lease Obligations on the date on which Original 2027 Secured Notes are first issued Issue Date, any reclassification of 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 clause of this Section 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 authenticated under this Indenture such Refinancing would cause the maximum amount of Indebtedness thereunder to be exceeded at such time, then such Refinancing will initially nevertheless be permitted thereunder and such Indebtedness will be deemed to have been incurred on under Section 4.09(b)(1) so long as (x) the Liens securing such date Refinancing Indebtedness have a lien priority equal (or junior in reliance 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 exception provided Indebtedness being Refinanced and the amount of all fees and expenses, including premiums and defeasance costs, incurred in connection with such Refinancing; and
(7) for the avoidance of doubt, all Indebtedness 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 of this covenant and clause (40) of the definition of Permitted Debt. The accrual Liens and (z) in an aggregate principal amount of interest or Preferred Stock or Disqualified Stock dividends or distributions$6.069 million of Notes, pursuant to 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 first paragraph of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges covenant and clause (2)(iii) of the Company as accrued to the extent required by the definition of such term. The 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 any Indebtedness outstanding as of any denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date will be:
(a) the accreted value of the Indebtednesssuch Indebtedness was incurred, in the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtednessterm debt, or first committed, in the case of any revolving credit debt; provided, that, if such Indebtedness is incurred to Refinance other Indebtedness; and
(c) Indebtedness denominated in respect of Indebtedness of another Person secured by a Lien 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 assets of the specified Person, the lesser of:
(1) the Fair Market Value of such assets at the date of determination; andsuch 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.
(2e) the The principal amount of any Indebtedness incurred to Refinance other Indebtedness, if incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of the other Person.such R
Appears in 1 contract
Sources: Indenture (Endo International PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company Restricted Subsidiaries will not issue any Disqualified Stock Stock, and the Restricted Subsidiaries will not permit any of its Restricted Subsidiaries to issue any Preferred Stockpreferred stock; provided, however, that the Issuers Company and any of the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) ), or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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 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 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 of $30 million of Indebtedness of non-Guarantors would be outstanding pursuant to this Section 4.09(a) at such time.
(b) The provisions of Section 4.09(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 Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderof (a) Indebtedness, letters of credit and bankers’ acceptances under Credit Facilities up to an aggregate amount outstanding as of any date of incurrence of any such Indebtedness, including the aggregate amount of any Permitted Refinancing Indebtedness incurred and outstanding pursuant to clause (1)(b) as of such date, not to exceed (i) the greater of (i) $700.0 125 million and the Borrowing Base as of such date plus (ii) $175.0 415 million plus 35.0% less (iii) the sum of all principal payments with respect to such Indebtedness pursuant to Section 4.10(b)(1) and (b) Permitted Refinancing Indebtedness incurred with respect to any Indebtedness incurred pursuant to the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceforegoing clause (1)(a);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes to be and Subsidiary Guarantees issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Equity Interests of any of its Restricted SubsidiariesPerson owning such assets), in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 35 million and (ii) 3.012.5% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), ) or (4)) above, this clause (5), clause (1416), (17), (23) or (1524) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness Indebtedness, and 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 Company, 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 Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company 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 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 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;
(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 fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(1211) 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 of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of business; provided that the underlying obligation to perform is that of 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 borrowed money;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary 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) any Permitted Acquisition 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, licensees, contractors, franchisees or customers of obligations, other than Indebtedness; and, 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 additional Indebtedness or the issuance by 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 Disqualified Stock 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, as of the date of incurrence of any Indebtedness pursuant to this clause (16), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (i) $75.0 50 million and (ii) 5.020.0% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as of the date of incurrence);
(17) the incurrence of Acquired Debt (which for purposes of this provision shall include preferred stock) 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 2.00 to 1.00 or issuance(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;
(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) 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;
(20) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(21) Indebtedness representing deferred compensation to employees of the Company 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 in connection with deposit accounts;
(23) Attributable Indebtedness in an aggregate principal amount at any time outstanding, as of the 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 $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 in connection with securitizations of accounts receivable and all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such 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 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 any other Indebtedness of the 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 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, (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 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 (1525) 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, incurrence (or later redivide reclassify such Indebtedness in whole or reclassify all or a portion of such item of Indebtedness, in part) in any manner that complies with this Section 4.09. Indebtedness under In addition, the Credit Agreement 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be treated as an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided . Notwithstanding the foregoing, the maximum amount of Indebtedness that the amount thereof may be incurred pursuant to this Section 4.09 shall not be included in Fixed Charges of the Company as accrued deemed to be exceeded with respect to any outstanding Indebtedness due solely to the extent required by the definition result 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 of determination; and
(2) the amount of the Indebtedness of the other Person.fluctu
Appears in 1 contract
Sources: Indenture (Diamond Foods Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, provided that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 3.00 to 1.01.00, 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 preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers and Company or any Restricted Subsidiary of the Guarantors, Company of additional Indebtedness and letters of credit under the Senior Credit Facilities 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 Company and its Restricted Subsidiaries thereunder) not to exceed the excess of (a) the greater of (ix) $700.0 100.0 million and (iiy) $175.0 million plus 35.0an amount equal to 35% of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrenceincurrence over (b) the sum of (x) 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 pursuant to Section 4.10(b)(1)(a) hereof or (II) that was included in clause (E) in the calculation of Excess Cash Flow in any fiscal year 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 (I) as a result of the application of any Net Proceeds of Asset Sales pursuant to Section 4.10(b)(1)(a) hereof or (II) that was included in clause (E) in the calculation of Excess Cash Flow in any fiscal year;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, or Attributable Debt relating to a sale leaseback transaction, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 7.5 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or ), (15), (17) and (19) of this Section 4.09(bparagraph (b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 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 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 with respect to commercial letters of credit functioning as or supporting any of the foregoing credit, bankers’ acceptances and performance and surety bonds or obligations and workers’ compensation claims 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;
(1213) endorsements of instruments or other items of deposit;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness owed to net oil any current or natural gas balancing positions arising former officer, director or employee of the Company or any of its Restricted Subsidiaries in connection with the ordinary course repurchase, redemption or other acquisition or retirement of businessEquity 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;
(1315) any obligation arising from agreements 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 providing for indemnificationof Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (16), adjustment together with the aggregate principal amount outstanding pursuant to clause (15)(b)(ii) above, not to exceed the excess of purchase price, earn outs, (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 similar obligationsany 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, incurred or assumed that was included in connection with clause (E) in the disposition or acquisition calculation of Excess Cash Flow in any business, assets or Capital Stock fiscal year;
(17) the incurrence by the Company of a Restricted Subsidiary Convertible Indebtedness in a transaction permitted by an aggregate principal amount under this Indenture; provided that such obligation is clause (17) not reflected as a liability on the face of the balance sheet 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 Subsidiary;
Subsidiaries as of the date of incurrence (14determined 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 Permitted Acquisition Indebtednesspro forma adjustments to Consolidated Cash Flow as set forth therein; and
(1519) 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 (1519), not to exceed the greater $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 (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as 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 date Company solely by virtue of such incurrence being unsecured or issuance. 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 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 (1519) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Senior Credit Agreement Facility outstanding on the date on which Notes are first issued and authenticated under this Indenture 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 or Preferred Stock or Disqualified Stock dividends or distributionspremium, 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 preferred 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued 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 the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such term. fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Castle a M & Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Partnership will not, and 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 Company Partnership will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyPartnership’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, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 300.0 million and (iiy) $175.0 million plus 35.0% an amount of Secured Indebtedness that would not cause the 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 Company’s Adjusted Consolidated Net Tangible Assets determined on net proceeds therefrom), as if the date Secured Indebtedness had been incurred at the beginning of such incurrencefour-quarter period;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 GuaranteesIndenture;
(4) the incurrence by the Company 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 the Partnership or any Restricted Subsidiary or (ii) Indebtedness of the Partnership or any Restricted Subsidiary incurred to finance the acquisition, construction, development, design or improvement of any assets (real or personal), including Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, purchase money obligations, Disqualified Stock, synthetic lease obligations and any Indebtedness assumed in each case, incurred for connection with the purpose acquisition of financing all any such assets (real or personal) or secured by a Lien on any part of such assets before the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in acquisition thereof; provided that the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingof Indebtedness outstanding at any time and permitted by this clause (4), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), shall not to exceed the greater of (ix) $45.0 200.0 million and (iiy) 3.015% of the Company’s Adjusted Consolidated Net Tangible Assets (determined as at the time of the date of such incurrence or issuanceincurrence);
(5) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses clause (2), (3), (4), (5), (1412), (13) or (1518) of this Section 4.09(b);
(6) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyPartnership, 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 Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company 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 Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, 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 Company Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations not for speculative purposes;
(9) the Guarantee by the Company Partnership or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Partnership or a Restricted Subsidiary of the Company Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.09(b); provided that if the Indebtedness being guaranteed 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 guaranteedGuaranteed;
(10) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of Indebtedness in respect connection with one or more standby or trade-related letters of self-credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations obligations, workers’ compensation claims, health or bid, plugging and abandonment, appeal, reimbursement, performanceother types of social security benefits, surety and bonds, completion guarantees or other similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations, including self-bonding arrangements, in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or pursuant to self-insurance obligations and workers’ compensation claims not in connection with the ordinary course borrowing of businessmoney or the obtaining of advances;
(11) the incurrence by the Company Partnership 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 incurrence by the Company Partnership or any of its Restricted Subsidiaries of in-kind obligations relating Subsidiary incurred in connection with any sale and leaseback transaction, provided the Attributable Debt with respect to net oil or natural gas balancing positions arising all sale and leaseback transactions in the ordinary course aggregate at any one time outstanding shall not exceed the greater of business(x) $30.0 million and (y) 2.5% of Consolidated Net Tangible Assets (determined at the time of incurrence of such Attributable Debt);
(13) any obligation 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 Company Partnership or any Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or 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; and
(15) the incurrence by the Company 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 Indebtedness, the issuance by the Partnership of any Disqualified Stock or the issuance by the Company any Guarantor of any Disqualified 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 (1518), not to exceed the greater of (ix) $75.0 100.0 million and (iiy) 5.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of 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 Indebtedness, Disqualified Stock or Preferred Stock meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred or issued pursuant to Section 4.09(a)) hereof, the Company Partnership will be permitted to divide, classify and reclassify such item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock on the date of its incurrenceincurrence or issuance, or later redivide or 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 the Credit Agreement 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 DebtSection 4.09(b)(1). The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company Partnership as accrued to the extent required by the definition of such term. 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 incurred. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Partnership 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:
(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 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 Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period; provided that the aggregate principal amount of Indebtedness (including Acquired Debt) incurred or preferred stock that may be issued, as applicable, pursuant to the foregoing, together with any amounts incurred under clause (13) of the following paragraph, by Non-Guarantor Subsidiaries shall not exceed the greater of (x) $150.0 million and (y) 5.0% of Consolidated Total Assets.
(b) The provisions of Section 4.09(a) will hereof shall 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 Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $1,475.0 million less the aggregate amount of all (i) $700.0 million Secured Indebtedness incurred in reliance on clause (1) of Section 4.12 and (ii) $175.0 million plus 35.0% Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of this Indenture to repay permanently any term Indebtedness under a Credit Facility or to repay permanently any revolving credit Indebtedness under a Credit Facility and effect a corresponding permanent commitment reduction thereunder pursuant to Section 4.10 hereof and (y) the maximum principal amount of Indebtedness that could be incurred such that after giving effect to such incurrence, the Secured Leverage Ratio of the Company would be no greater than 3.25 to 1.00 (calculated assuming all Indebtedness incurred under this clause (1) is secured and without netting the cash proceeds of any such Indebtedness);
(2) the incurrence by the Company and any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, economic development loans and purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an ; provided that the aggregate principal amount 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 (43), shall not to exceed the greater of (ix) $45.0 150.0 million and (iiy) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceTotal Assets;
(54) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1517) of this Section 4.09(b);
(65) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (76);
(8) 7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and entered into for bona fide hedging purposes (and not for speculative purposes) as determined in good faith by the Board of Directors or senior management of the Company;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(109) the incurrence Indebtedness incurred by the Company or any of its Restricted Subsidiaries of Indebtedness in constituting reimbursement obligations with 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 to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims issued 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 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; and
(15) 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 (15), not to exceed the greater without limitation letters of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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) credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness of another Person secured by a Lien on with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance; provided, however, that either upon the assets of the specified Person, the lesser of:
(1) the Fair Market Value drawing of such assets at letters of credit or the date incurrence of determination; and
(2) the amount of the Indebtedness of the other Person.such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence or self-insurance;
Appears in 1 contract
Sources: Indenture (Patrick Industries Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries that is not a Guarantor to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), ) as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) will . The first paragraph of this covenant shall 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 Issuers Company and the Guarantors, its Restricted Subsidiaries of Indebtedness and letters of credit under the Credit Facilities 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 Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to $1.125 billion, including all Permitted Refinancing Indebtedness incurred pursuant to clause (5) of this paragraph to refund, refinance or replace any Indebtedness incurred pursuant to this clause (1), less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries to repay term Indebtedness under the date of such incurrenceCredit Facility or to reduce commitments with respect to revolving credit borrowings under the Credit Facility pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Series A Notes, the Subsidiary Guarantees, the Series B Notes to be issued on the date of this Indenture and the related Note GuaranteesGuarantees thereof;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any such Restricted Subsidiary, or in respect of its Restricted Subsidiariesa sale and leaseback transaction, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred pursuant to renew, clause (5) of this paragraph to refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 20.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) 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 or replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company that is either Existing Indebtedness or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of by this Section 4.09(b)Indenture;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness, and such Indebtedness and the payee is held by a Restricted Subsidiary that 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging (1) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (2) exchange rate risk or raw materials price risk;
(9) 8) the Guarantee guarantee by the Company 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 covenant;
(9) the Indebtedness being guaranteed is subordinated to or pari passu with shares of Class A Convertible Preferred Stock outstanding as of the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteeddate hereof;
(10) the incurrence by the Company or any of its Restricted the Company's Foreign Subsidiaries of Indebtedness in respect an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred pursuant to clause (5) of self-insurance obligations this paragraph to refund, refinance or bidreplace any Indebtedness incurred pursuant to this clause (10), 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 not to exceed $60.0 million at 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 businesstime outstanding;
(11) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is Non-Recourse Debt with respect to the Company or any of and its other 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;(except for Standard Securitization Undertakings); and
(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; and
(15) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1512), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person40.0 million.
Appears in 1 contract
Sources: Indenture (Scotts Company)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if in each case the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the preferred stock or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) will 4.09 shall 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”"):
(1i) the incurrence by the Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $950.0 million less any mandatory prepayments actually made thereunder (to the greater extent, in the case of payments of revolving credit Indebtedness, that the corresponding commitments have been permanently reduced) or scheduled payments actually made thereunder (i) $700.0 million and (ii) $175.0 million plus 35.0% other than the repayment of the Company’s Adjusted Consolidated Net Tangible Assets determined on Interim Term Loan using the date net proceeds from the sale of such incurrencethe Initial Notes);
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 million and (ii) 3.05% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.09 or clauses (2ii), (3iii), (4iv), (5), (14v) or (15x) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, 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 Company, 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Company and the GuarantorsRestricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 1,800.0 million, (ii) $175.0 million plus 35.0the Borrowing Base at such time, and (iii) 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or other acquisition cost or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 450.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), or (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 businessbusiness 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 five 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; and;
(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 (1516), not to exceed exceed, at any one time oustanding, the greater of (i) $75.0 650.0 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 event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1520) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding on or prior to the date on which Notes are first issued and authenticated under this Indenture 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 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.. For purposes of determining compliance with any 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 case of revolving credit debt, the date such Indebtedness was first committed or first incurred (whichever yields the lower U.S. dollar equivalent)); provided that if such Indebtedness is incurred or Disqualified Stock or Preferred Stock is issued to refinance other Indebtedness, 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 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 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 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 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma forma, consolidated 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and any Guarantor of additional Indebtedness pursuant to the Guarantors, of Bank Credit Facility or other Indebtedness and letters of credit under Credit Facilities in an constituting Senior Debt; provided that the aggregate principal amount at any one time of all such Indebtedness outstanding under this clause (1) as of any date of incurrence (with letters of credit being deemed to have a principal amount equal after giving pro forma effect to the maximum potential liability application of the Company and its Restricted Subsidiaries thereunder) proceeds of such incurrence), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (1), shall not to exceed the greater of (ix) $700.0 825.0 million and (iiy) $175.0 million plus 35.0% of 3.5 times the Company’s Adjusted Consolidated EBITDA for the period of four fiscal quarters most recently ended prior to such date for which internal financial reports are available, ended not more than 135 days prior to such date (using the pro forma calculation conventions for Consolidated EBITDA referenced in the definition of Fixed Charge Coverage Ratio), in each case, to be reduced dollar-for-dollar by the amount of the aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales applied to permanently prepay or repay Indebtedness under the date of such incurrenceBank Credit Facility or any other Indebtedness constituting Senior Debt under Sections 3.10, 4.10 and 4.11 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, FF&E Financing, mortgage financings or purchase money obligations, in each case, incurred for to acquire or refinance furniture, fixtures and equipment incident to and useful in the purpose operation of financing all Casinos, Casino Hotels or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesCasino Related Facility, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater sum of (x) the product of (i) $45.0 10.0 million and (ii) 3.0% of each new Casino acquired or built by the Company’s Adjusted Consolidated Net Tangible Assets determined as of Company after the date of such incurrence this Indenture, and (y) the product of (i) $7.5 million and (ii) each new Casino Hotel or issuanceCasino Related Facility acquired or built by the Company after the date of this Indenture;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (1), (2), (3), (4), (5), (1411) or (1513) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations entered into in the ordinary course of business and not as speculative Investments, but as hedging transactions designed to protect the Company and its Restricted Subsidiaries against fluctuations in interest rates in connection with Indebtedness otherwise permitted under this Indenture or against exchange rate risk or commodity pricing risk;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company or of any other Guarantor, or the guarantee by a Restricted Subsidiary of Indebtedness of the Company or any other Restricted Subsidiary, 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 may only be incurred by a Guarantor and must be subordinated to, or pari passupassu with, as applicable, the Notes 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 or bidobligations, plugging and abandonment, appeal, reimbursement, performanceperformance bonds, surety and similar appeal bonds and completion guarantees other similar arrangements and letters of credit provided by the Company or a and its Restricted Subsidiary Subsidiaries incurred in the ordinary course of business (including to support the Company’s and any Guarantees its Restricted Subsidiaries’ application for gaming licenses or such workers’ compensation claims, self-insurance obligations, bonds or guarantees) and in amounts customary in the industry in which the Company and its Restricted Subsidiaries operate; provided, however, that upon drawing of such letters of credit functioning as or supporting the incurrence of any such Indebtedness for borrowed money, any reimbursement obligations with respect to such Indebtedness are reimbursed within 30 days following such incurrence;
(11) Indebtedness arising in connection with the endorsement of the foregoing bonds or obligations and workers’ compensation claims instruments for deposit in the ordinary course of business;
(1112) the incurrence by Indebtedness arising from agreements of 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 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, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock a subsidiary, other than guarantees of a Restricted Subsidiary in a transaction permitted Indebtedness incurred by this Indentureany Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing that acquisition; provided that that:
(A) such obligation Indebtedness is not reflected as a liability at the time of such incurrence or assumption on the face of the balance sheet of the Company or any of its Restricted Subsidiary;
Subsidiaries (14) any Permitted Acquisition Indebtednesscontingent 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
(15B) in the case of a disposition, 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 Company and/or that Restricted Subsidiary in connection with that disposition;
(13) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that (x) immediately after giving effect to the incurrence of such Acquired Debt and such other Indebtedness, as the case may be, on a pro forma basis as if such incurrence (and the related merger, consolidation or other acquisition) had occurred at the beginning of the applicable four-quarter period, the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries immediately prior to such merger, consolidation or other acquisition and (y)(i) in the case of Acquired Debt, has a Weighted Average Life to Maturity equal to or greater than three years and (ii) in the case of any such other Indebtedness, has a final maturity date at least 91 days after the Stated Maturity of the Notes and has a Weighted Average Life to Maturity greater than the Weighted Average Life to Maturity of the Notes; and
(14) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary 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 outstandingoutstanding under this clause (14), including all Permitted Refinancing Indebtedness incurred to repay, redeem, extend, renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1514), not to exceed the greater of (i) $75.0 40.0 million and (ii) 5.03.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets. For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness or any portion thereof meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1514) 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 or any portion thereof on the date of its incurrence, or and may later redivide or reclassify all or a any portion of such item of Indebtedness, in any manner that complies with this Section 4.094.09 hereof. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture Indenture, including the Bank Credit Facility, 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 or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued 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 incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and the Company may issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness issue preferred stock (including Acquired DebtDisqualified Stock) or issue Preferred Stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.09(a) 4.07 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”):
(1a) the incurrence by the Issuers Company and the Guarantors, its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence2,000 million;
(2b) Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by (a) the Notes and the related Subsidiary Guarantees to be issued on the date of 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 related Note GuaranteesSubsidiary Guarantees in accordance with the terms of the Registration Rights Agreement;
(4d) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4d), not to exceed the greater of (i) $45.0 175.0 million and (ii) 3.03.5% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5e) 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, refundextend, refinance, renew, replace, defease defease, or discharge any refund 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 was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) 4.07 or clauses (2b), (3c), (4d), (5l), (14m), (o), (z) or this clause (15e) of this Section 4.09(b)paragraph;
(6f) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness or the issuance of Disqualified Stock or Preferred Stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (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 Company or a Restricted Subsidiary 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 Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness Indebtedness, Disqualified Stock or Preferred Stock by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6f);
(7g) 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of 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 (ii) exchange rate risk with respect to obligations under any agreement or Indebtedness, or with respect to any asset, of such Person that is payable or denominated in a currency other than U.S. Dollars;
(9h) the Guarantee guarantee by the Company or any of its the 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 guaranteed4.07;
(10i) 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 preferred stock (including Disqualified Stock) in the form of additional shares of the same class of preferred stock (including Disqualified Stock) will not be deemed to be an incurrence by of Indebtedness or an issuance of preferred stock (including Disqualified Stock) for purposes of this Section 4.07; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued;
(j) Indebtedness of the Company or any Restricted Subsidiary consisting of its Restricted Subsidiaries of Indebtedness guarantees, indemnities, hold backs or obligations in respect of self-insurance purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock of restricted Subsidiaries, or contingent payment obligations incurred in connection with the acquisition or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided disposition of assets which are contingent on the performance of the assets acquired or disposed of;
(k) Indebtedness represented by (i) letters of credit for the account of the Company or a any Restricted Subsidiary in or (ii) other obligations to reimburse third parties pursuant to any surety bond or other similar arrangements, to the ordinary course of business and any Guarantees or extent that such letters of credit functioning and other obligations, as or supporting any of the foregoing bonds or obligations and case may be, are intended to provide security for workers’ compensation claims claims, payment obligations in connection with self-insurance, in connection with participation in government reimbursement or other programs or other similar requirements in the ordinary course of business;
(11l) the incurrence by the Company or any Restricted Subsidiary of its Restricted Subsidiaries 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 fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five Business DaysDays of incurrence;
(12n) 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 incurrence by the Company financing of insurance premiums or any of its Restricted Subsidiaries of in-kind (ii) take or pay obligations relating to net oil or natural gas balancing positions arising in supply agreements, in each case in the ordinary course of business;
(13p) 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 obligation arising from agreements 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 Subsidiary Subsidiaries to pay the deferred purchase price of the Company providing for indemnification, adjustment of purchase price, earn outs, goods or similar obligations, in each case, incurred services or assumed progress payments in connection with the disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this Indenturesuch goods and services; provided that such obligation is not reflected as a liability 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 face incurrence of the balance sheet 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;
(14x) Indebtedness incurred on behalf of or representing Guarantees of Indebtedness of Permitted Joint Ventures of the Company or any Permitted Acquisition Indebtedness; andRestricted Subsidiary not in excess of the greater of $50 million and 1.0% of Total Assets at any one time outstanding;
(15y) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or (which may include, but is not limited to, Indebtedness of the issuance by types referred to in the Company of any Disqualified Stock 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15y), not to exceed the greater of (i) $75.0 300 million and (ii) 5.06.0% of Total Assets; and
(z) Indebtedness of (x) the Company’s Adjusted Consolidated Net Tangible Assets determined as of Company or a Restricted Subsidiary incurred to finance an acquisition or (y) a Restricted Subsidiary outstanding on the date on which such Restricted Subsidiary was acquired by the Company or otherwise became a Restricted Subsidiary; provided that after giving effect thereto, (a) the Company would be permitted to incur at least $1 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test in the first paragraph of this Section 4.07, or (b) the Fixed Charge Coverage Ratio would be no worse than immediately prior thereto; provided, however, that up to $100 million in aggregate principal amount of any such incurrence or issuanceIndebtedness may be incurred and outstanding at any time without regard to the previous proviso. For purposes of determining compliance with this Section 4.094.07, (x) 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 (1a) through (15z) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09(a)4.07, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.094.07. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1a) of the definition of “Permitted Debt. The accrual ”; and (y) at the time of interest or Preferred Stock or Disqualified Stock dividends or distributionsincurrence, the accretion 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 4.07 (or amortization any portion thereof) without giving pro forma effect to the Indebtedness incurred on such date pursuant to the second paragraph of original issue discountthis 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 payment maximum amount 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 that may be incurred pursuant 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 this covenant will not be deemed to be an incurrence exceeded with respect to any Indebtedness solely as a result of fluctuations in exchange rates or currency values. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness that is otherwise included in the determination of particular amount of Indebtedness or an issuance shall not be included in the determination of Preferred Stock or Disqualified Stock for purposes such amount of this Section 4.09Indebtedness; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount incurrence of the Indebtedness represented by such guarantee or letter of credit, as the other Personcase may be, was in compliance with this Section 4.07.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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”1) Incur any Indebtedness (including Acquired Debt), and the Company will not or issue any Disqualified Stock and will not Capital Stock, or
(2) cause or permit any of its Restricted Subsidiaries to Incur any Indebtedness or issue any Preferred StockDisqualified Capital Stock or preferred stock, in each case, other than Permitted Indebtedness; provided, however, that the Issuers Company may incur issue Disqualified Capital Stock and may Incur Indebtedness (including including, without limitation, Acquired Debt) or issue Disqualified Stock), and the Guarantors any Guarantor may incur issue preferred stock or Incur Indebtedness (including including, without limitation, Acquired Debt) or issue Preferred Stock), if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a after giving pro forma basis (including a pro forma effect to such proposed Incurrence or issuance and the receipt and 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, Company’s Consolidated Coverage Ratio would be at the beginning of such four-quarter periodleast 2.00 to 1.00.
(b) This Section 4.09(a) 4.09 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 DebtIndebtedness”):
(1) Indebtedness of the incurrence Company or any Restricted Subsidiary outstanding on the Issue Date (other than Indebtedness under the Bank Credit Agreement) as reduced by the Issuers amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereof;
(2) Indebtedness Incurred by the Company under the Initial Notes and by the Guarantors, of Guarantors under the Guarantees and any Exchange Notes (and guarantees thereof) issued in exchange for the Initial Notes pursuant to the registration rights agreement;
(3) Indebtedness and letters of credit under Incurred by the Company or any Restricted Subsidiary pursuant to the Bank Credit Facilities in an Agreement or other Credit Facilities; provided that the aggregate principal amount at any one time of all such Indebtedness outstanding under this clause (13) as of any date of Incurrence (with letters of credit being deemed to have a principal amount equal after giving pro forma effect to the maximum potential liability application of the Company and its Restricted Subsidiaries thereunder) proceeds of such Incurrence), including all Permitted Refinancing Indebtedness Incurred to repay, redeem, extend, refinance, renew, replace, defease or refund any Indebtedness Incurred pursuant to this clause (3), shall not to exceed the greater of (i) $700.0 million 2.4 billion and (ii) $175.0 million plus 35.0% 4.50:1.00 Consolidated EBITDAM of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries for the twelve month period ended at the end of the Existing Indebtedness;
(3) the incurrence most recent fiscal quarter for which financial statements are available, to be reduced dollar-for-dollar by the Issuers and aggregate amount of all Net Cash Proceeds of Asset Sales applied by an Obligor to repay Indebtedness under the Guarantors of Indebtedness represented by the Notes Credit Facilities pursuant to be issued on the date of this Indenture and the related Note GuaranteesSection 4.10 hereof;
(4) the incurrence by Indebtedness of a Restricted Subsidiary to the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange forGuarantor, or the net proceeds of which are used to renew, refund, refinance, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 Notesany Guarantor, 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 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;
(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, for so long as such Indebtedness is covered within five Business Daysheld by an Obligor; provided that if as of any date any Person other than an Obligor acquires any such Indebtedness or holds a Lien in respect of such Indebtedness (other than a Permitted Lien), such acquisition or holding shall be deemed to be an Incurrence of Indebtedness not constituting Permitted Indebtedness under this clause (4) by the issuer of such Indebtedness;
(125) the incurrence Permitted Refinancing Indebtedness;
(6) FF&E Financing and other Indebtedness Incurred by the Company or any Restricted Subsidiary solely to finance the construction or acquisition or improvement of, or consisting of Capitalized Leased Obligations Incurred to acquire rights of use in, capital assets useful in the Company’s or such Subsidiary’s business, as applicable, and, in any such case, Incurred prior to or within 270 days after the construction, acquisition, improvement or leasing of the subject assets, not to exceed $75 million in aggregate principal amount outstanding at any time (including all Permitted Refinancing Indebtedness Incurred to repay, redeem, extend, refinance, renew, replace, defease or refund any Indebtedness Incurred pursuant to this clause (6)) for all of the Company and its Restricted Subsidiaries;
(7) Hedging Obligations and Interest Swap Obligations entered into not as speculative Investments but as hedging transactions designed to protect the Company and its Restricted Subsidiaries of in-kind obligations relating to net oil against fluctuations in interest rates in connection with Indebtedness otherwise permitted hereunder or natural gas balancing positions arising in the ordinary course of businessagainst exchange rate risk or commodity pricing risk;
(13) any obligation arising from agreements 8) Indebtedness of the Company or any Restricted Subsidiary arising in respect of (x) performance bonds, completion guarantees and similar arrangements (to the Company providing extent that the Incurrence thereof does not result in the Incurrence of any obligation for indemnification, adjustment the payment of purchase price, earn outs, or similar obligationsborrowed money of others), in each casethe ordinary course of business; provided, incurred or assumed that such Indebtedness shall be Incurred solely in connection with the disposition development, construction, improvement or acquisition enhancement of any business, assets or Capital Stock of a Restricted Subsidiary useful in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face business of the balance sheet Company and its Restricted Subsidiaries or the development, improvement or enhancement of the operations of the Company and its Restricted Subsidiaries or (y) Support Agreements;
(9) Indebtedness of the Company or any Restricted Subsidiary;
Subsidiary arising in respect of letters of credit, bankers’ acceptances, worker’s compensation claims, payment obligations in connection with self-insurance or similar obligations, surety bonds and appeal bonds (14) any Permitted Acquisition Indebtedness; and
(15) to the incurrence by extent that the Company or any of its Restricted Subsidiaries of additional Indebtedness or Incurrence thereof does not result in the issuance by the Company Incurrence 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 (15obligation for the payment of borrowed money of others), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09, in the event that an item ordinary course of 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), 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 portion of such item of Indebtednessbusiness, in any manner that complies with this Section 4.09. Indebtedness under amounts and for the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on purposes customary in such date in reliance on the exception provided by clause (1) of the definition of 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 discountPerson’s industry;
(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
Sources: Indenture (Station Casinos LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred equity; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred equity, if the Fixed Charge Coverage Ratio for the Company’s '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 preferred equity is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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 preferred equity or Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of revolving credit Indebtedness and letters of credit under pursuant to one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $15.0 million at any one time outstanding, less permanent reductions in the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of amount available thereunder made from the Company’s Adjusted Consolidated Net Tangible Proceeds from Assets determined on the date of such incurrenceSales;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3A) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesExchange Notes to be issued pursuant to the Registration Rights Agreement and (B) their respective obligations arising under the Collateral Documents to the extent such obligations represent Indebtedness;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(53) 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, refundextend, refinance, renew, replace, defease or discharge any refund 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (15) of this Section 4.09(b) or this clause (3);
(64) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:49
(A5) if the Company or any Guarantor is the obligor on such Indebtedness and 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 incurrence of all Obligations then due with respect to the Notes, in the case of the 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 Company or a Restricted Subsidiary of intercompany indebtedness between the Company and the Existing Subsidiaries not to exceed $5.0 million at any one time outstanding;
(ii6) any sale or other transfer of any such Indebtedness 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 incurrence of such Indebtedness owed by the Company Existing Subsidiaries to the Principal Holders or such Restricted Subsidiary, as the case may be, that was their Related Parties not permitted by this clause (6)to exceed $2.0 million at any one time outstanding;
(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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Company 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 guaranteedcovenant;
(109) the incurrence by the Company or any of its Restricted Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, 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;
(11) such event shall be deemed to constitute 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 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 that was not 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; and
(15) 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 (159), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Hammons John Q Hotels Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Partnership will not, and 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 Company Partnership will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyPartnership’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, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers Partnership and the Guarantors, any Restricted Subsidiary (whether as borrower or guarantor) of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Partnership and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 600.0 million and (ii) the sum of (x) $175.0 250.0 million plus and (y) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Partnership and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees to be issued on the date of this Indenture and (b) the Exchange Notes and the related Note GuaranteesGuarantees issued pursuant to any Registration Rights Agreement;
(4) the incurrence by the Company Partnership 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 or other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company Partnership or any of its Restricted SubsidiariesSubsidiaries (together with improvements, in an aggregate principal amount outstandingadditions, including all accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Permitted Refinancing Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 25.0 million and (iib) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of at the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company 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, replace, defease or 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 or Preferred Stock that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (1415) or (1517) of this Section 4.09(b);
(6) the incurrence by the Company Partnership or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Partnership and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Partnership or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyPartnership, 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 Company Partnership or a Restricted Subsidiary of the Company Partnership and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Partnership or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyPartnership’s Restricted Subsidiaries to the Company 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 Company Partnership or a Restricted Subsidiary of the CompanyPartnership; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Partnership or a Restricted Subsidiary of the CompanyPartnership, 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 Company Partnership or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are customary in the Oil and Gas Business and not for speculative purposes;
(9) the Guarantee by the Company Partnership or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Partnership or a Restricted Subsidiary of the Company Partnership to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.09(b); 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 Company Partnership 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 issued or provided by by, or for the Company account of, the Partnership or a Restricted Subsidiary in the ordinary course of business and any Guarantees or obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company Partnership 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 Partnership 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) the incurrence of any obligation arising from agreements of the Company Partnership or any Restricted Subsidiary of the Company Partnership providing for indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price, holdbacks, earn outs, 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 Partnership or any Restricted Subsidiary;
(14) the incurrence by the Partnership or any Permitted Acquisition Indebtedness; andof 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 (a) 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 (14)(a) and then outstanding does not exceed $25.0 million or (b) the pledge of (or a Guaranty limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the Partnership or such Restricted Subsidiary to secure such Indebtedness and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(15) the incurrence by the Company Partnership or its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(16) the incurrence by the Partnership or its Restricted Subsidiaries of Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Partnership and the Restricted Subsidiaries; and
(17) the incurrence by the Partnership or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company Partnership of any Disqualified Stock or by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding), including when taken together with the outstanding amount of all Permitted Refinancing other Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock incurred or issued pursuant to this clause (1517), not to exceed the greater of (i) $75.0 50.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of 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 not having the benefit of a Lien on assets, or guarantee of a Person, that benefits the other Indebtedness or having the benefit of such a Lien or guarantee ranking subordinate or junior to a Lien or guarantee benefitting the other Indebtedness. 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 4.09. For purposes of determining compliance with this Section 4.09, in the event that 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 (1517) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company Partnership 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 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 Company Interactive Health will not, and 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 Company Interactive Health will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Interactive Health may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyInteractive Health’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 preferred stock is issued, as the case may be, would have been at least 2.25 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Interactive Health and the Guarantors, any Subsidiary Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Interactive Health and its Restricted Subsidiaries thereunder) not to exceed (A) the greater of (i) $700.0 20.0 million and or (ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence, less (B) the aggregate amount of all Net Proceeds of Asset Sales applied by Interactive Health or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company Interactive Health and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 and, if a Domestic Subsidiary is formed, created or acquired after the date of this Indenture and not designated an Unrestricted Subsidiary, the Note Guarantee to be made by such Domestic Subsidiary in accordance with this Indenture;
(4) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Interactive Health or any of its Restricted SubsidiariesSubsidiaries or incurred within 180 days after such purchase, lease, construction or improvement, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2), (3), (4), (5), (1412) or (15) of this Section 4.09(b);
(6) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Interactive Health and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Interactive Health or any Guarantor is the obligor on such Indebtedness and the payee is not the Company Interactive Health 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 CompanyInteractive Health, or the Note 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 Company Interactive Health or a Restricted Subsidiary of the Company Interactive Health and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Interactive Health or a Restricted Subsidiary of the CompanyInteractive Health, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Interactive Health or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyInteractive Health’s Restricted Subsidiaries to the Company Interactive Health or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Interactive Health or a Restricted Subsidiary of the CompanyInteractive Health; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Interactive Health or a Restricted Subsidiary of the CompanyInteractive Health, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Interactive Health or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Interactive Health or a Restricted Subsidiary of the Company to the extent Interactive Health 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance 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;
(11) the incurrence by the Company Interactive Health or any of its Restricted Subsidiaries the Subsidiary 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;
(12) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of in-kind obligations relating Indebtedness in an aggregate principal amount at any time outstanding pursuant to net oil this clause (12), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or natural gas balancing positions arising discharge any Indebtedness incurred pursuant to this clause (12), not to exceed $5.0 million (or the equivalent thereof, measured at the time of each incurrence, in the ordinary course of businessapplicable foreign currency);
(13) any obligation arising from agreements Indebtedness consisting of the Company or any Restricted Subsidiary of the Company providing for customary indemnification, contribution, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, business or assets of Interactive Health or any Restricted Subsidiary or Capital Stock of a Restricted Subsidiary Subsidiary; provided, that (1) with respect to any such disposition, the maximum aggregate liability in a transaction permitted respect of all such Indebtedness incurred pursuant to this clause (13) shall at no time exceed the gross proceeds actually received by this Indenture; provided that Interactive Health and its Restricted Subsidiaries in connection with such obligation dispositions and (2) all such Indebtedness is not reflected as a liability on the face discharged within 30 days of the balance sheet of date the Company amount thereof becomes absolute or any Restricted Subsidiaryliquidated;
(14) the issuance by Interactive Health of Disqualified Stock to (1) any Permitted Acquisition Indebtednessemployee pursuant to an equity incentive plan or other similar plan approved by Interactive Health’s Board of Directors or (2) any plan established for the benefit of employees of Interactive Health or any of its Restricted Subsidiaries; provided, that Interactive Health’s potential redemption or repurchase obligations with respect to such Disqualified Stock shall not exceed $1.0 million at any time outstanding; and
(15) the incurrence by the Company Issuers or any of its Restricted Subsidiaries the Subsidiary Guarantors 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 (15), not to exceed $2.0 million. Interactive Health 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 Interactive Health or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the greater 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 (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Interactive Health solely by virtue of the date being unsecured or by virtue of such incurrence being secured on a first or issuancejunior 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 (15) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Interactive Health will be permitted permitted, in its sole discretion, to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide classify or 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 Facilities outstanding on the date on which Notes the 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of Interactive Health as accrued. Notwithstanding any other provision of this Section 4.09, the Company maximum amount of Indebtedness that Interactive Health or any of its Restricted Subsidiaries may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as accrued to the extent required by the definition a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Interactive Health, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company and the Guarantors will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries (other than the Guarantors) to issue any Preferred Stockshares of preferred stock or preferred shares; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and any of the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Disqualified Stock, if 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis 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 been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantorsits Restricted Subsidiaries of (a) Indebtedness, of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities in an aggregate principal amount at any one time outstanding under this as of any date of incurrence of any such Indebtedness (together with the aggregate amount of any Permitted Refinancing Indebtedness outstanding as of such date that was incurred pursuant to clause (11)(b) (with letters of credit being and that is not deemed to have be incurred pursuant to another clause of this Section 4.09(b) or Section 4.09(a) as a principal result of reclassification) not to exceed (y) $1,200.0 million, plus (z) an amount equal to the maximum potential liability principal amount of Indebtedness that the Company and its Restricted Subsidiaries thereundercould incur such that, immediately after giving effect to the incurrence of such Indebtedness, the First Lien Net Leverage Ratio is equal to or less than 1.25:1.00 (assuming for purposes of such calculation that all such Indebtedness incurred pursuant to this clause (z) not to exceed the greater of is included in clause (i) $700.0 million of the definition of “First Lien Net Leverage Ratio”), and (iib) $175.0 million plus 35.0% any Permitted Refinancing Indebtedness incurred to extend, refinance, refund, renew, replace, defease or discharge any Indebtedness that was incurred pursuant to this clause (1) and was not, as of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of incurrence of such incurrencePermitted Refinancing Indebtedness, deemed to be incurred pursuant to another clause of this Section 4.09(b) or Section 4.09(a) as a result of reclassification;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company, the Issuers and the Subsidiary Guarantors of Indebtedness represented by the Notes to be and Note Guarantees issued on the date of this Indenture and the related Note GuaranteesIssue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings Obligations or purchase money obligations, including obligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings, including in connection with any Sale and Leaseback Transaction, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of designor refinancing the acquisition, replacement, construction, installation installation, repair or improvement of property, plant fixed or equipment used in the business of the Company or any of its Restricted Subsidiariescapital assets, in an aggregate principal amount 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 renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 175.0 million and (iib) 3.07.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence or issuanceincurrence);
(5) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), ) or (4)) above, this clause (5), clauses (1416), (17), (19), (25), (26) or (1527) of this below or pursuant to Section 4.09(b4.09(a);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owed to the Company and or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuers or any Guarantor is the obligor on such Indebtedness Indebtedness, and the payee is not one of the Company Issuers 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 CompanyIssuers, or the Note GuaranteeGuarantee 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 Company or a Restricted Subsidiary of the Company thereof and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will thereof shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness 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 the Company or to any of its Restricted Subsidiaries of any Preferred Stockpreferred shares or shares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; Company and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock or preferred shares by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary or joint venture of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09 and could have been incurred (in compliance with this Section 4.09; provided that if ) by 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 guaranteedPerson so Guaranteeing such Indebtedness;
(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 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;
(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 (except in the case of daylight overdrafts) drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysfunds in the ordinary course of business;
(1211) 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 or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims provided to the Company or any of its Restricted Subsidiaries, bankers’ acceptances, indemnities including through letters of credit, cash collateralization, performance, surety and similar bonds and completion guarantees provided 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; 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;
(1312) any obligation arising from the incurrence of Indebtedness that may be deemed to arise as a result of agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of deferred purchase priceprice adjustments, earn outs, earn-out or similar obligationsObligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, business or assets of the Company or Capital Stock any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that (a) any amount of such obligation is not reflected as a liability Obligations included on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary 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) any Permitted Acquisition 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; and, made in the ordinary course of business;
(15) the incurrence of Indebtedness by the Company or any of its Restricted Subsidiaries issued to current or former officers, directors, managers, consultants and employees, or their respective estates, executors, administrators, heirs, legatees, distributees, spouses or former spouses in connection with the redemption or purchase of additional Capital Stock, to the extent permitted by Section 4.07(b)(5);
(16) the incurrence by any Foreign Subsidiary of Indebtedness or and/or the issuance guarantee by the Company and/or any of any Disqualified Stock 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 (16), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater of (ia) $50.0 million and (b) 2.0% of Consolidated Total Assets (determined as of the date of incurrence);
(17) the incurrence by the Company or any of its Restricted Subsidiaries of any Capital 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 (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) $75.0 million and (iib) 5.03.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets (determined as of the date of such incurrence);
(18) Indebtedness in respect of Receivables Program Obligations;
(19) the incurrence of Acquired Debt or issuance. For purposes of determining compliance with this Section 4.09, other Indebtedness incurred 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 (15) aboveconnection with, or is entitled to be incurred pursuant to Section 4.09(a)in contemplation of, an acquisition (including by way of merger or consolidation) by the Company will be permitted to divide, classify and reclassify such item of Indebtedness on the date or any of its incurrence, or later redivide or 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 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. 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 Section 4.09Restricted Subsidiaries; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued after giving Pro Forma Effect to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
acquisition, either (a) the accreted value Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence (including a pro forma application of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
net proceeds therefrom) would be at least 2.0 to 1.0 or (b) the principal amount Company’s pro forma Fixed Charge Coverage Ratio would be equal to or greater than the actual Fixed Charge Coverage Ratio of the IndebtednessCompany immediately prior to such acquisition and incurrence;
(20) 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;
(21) 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 case ordinary course of any other Indebtedness; andbusiness;
(c22) Indebtedness in respect of overdraft facilities, employee credit card programs and other cash management arrangements in the ordinary course of business;
(23) Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(24) 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;
(25) the incurrence of Indebtedness by any Restricted Subsidiary of the Company that is not a Guarantor (other than the Issuers), and/or the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of another Person secured by a Lien on the assets any joint venture of the specified PersonCompany or any of its Restricted Subsidiaries, the lesser of:
in an aggregate principal amount (1or accreted value, as applicable) the Fair Market Value at any time outstanding, as of such assets at the date of determinationincurrence of any Indebtedness pursuant to this clause (25), including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (a) $50.0 million and (b) 2.0% of Consolidated Total Assets (determined as of the date of incurrence);
(26) 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 (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 (a) $100.0 million and (b) 4.0% of Consolidated Total Assets (determined as of the date of incurrence); and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Herbalife Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Borrower shall not, and will 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”"INCUR") any Indebtedness (including Acquired Debt), and the Company Borrower will not issue any Disqualified Stock and the Borrower will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that (x) the Issuers Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any of its Restricted Subsidiaries (other than Nortek and its Restricted Subsidiaries) may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio of the Borrower for the Company’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 Stock or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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 Preferred case may be, at the beginning of such four-quarter period, and (y) Nortek and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock, if the Fixed Charge Coverage Ratio of Nortek for 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 Stock or preferred stock is issued would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a6.06(a) will shall 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”"PERMITTED DEBT"):
(1a) the incurrence by the Issuers and the Guarantors, Borrower or any Restricted Subsidiary of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Borrower and its the Restricted Subsidiaries thereunder) not to exceed $1.0 billion and (b) the incurrence by the Borrower or any Restricted Subsidiary of additional Indebtedness under Credit Facilities 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 Borrower and the Restricted Subsidiaries thereunder) not to exceed the greater of amount, if any, by which (ix) $700.0 million and (ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence exceeds (y) the aggregate amount of Indebtedness permitted to be incurred pursuant to the immediately preceding clause (a) as of the date of such incurrence, less, in the case of clause (a), the aggregate amount of all Net Proceeds of Asset Sales, applied by the Borrower or any Restricted Subsidiary 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 6.09(b)(1) and, in the case of each of clauses (a) and (b), less amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Company and its Borrower or any Restricted Subsidiaries Subsidiary of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors Borrower of Indebtedness represented by the Initial Loans, Extended Loans or Exchange Notes to be issued on made or issued, as applicable, pursuant to the date of this Indenture Loan Documents, any Loan Guarantees in respect thereof and the related Exchange Note GuaranteesIndenture;
(4) the incurrence by the Company 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 all or any part of the purchase price price, or cost of designconstruction or improvement, construction, installation of property (real or improvement of propertypersonal), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company Borrower or any of its Restricted Subsidiaries (whether through the direct acquisition of Permitted Refinancing Indebtedness in exchange for, such assets or the net proceeds of which are used to renew, refund, refinance, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(B) (i) any subsequent issuance or transfer acquisition of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any Person owning such Indebtedness 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 incurrence of such Indebtedness by the 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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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
(cassets) 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.an
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Issuers nor any Guarantor will issue any Disqualified Stock, and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Consolidated 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 or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers and the Guarantors, or any Guarantor of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to the greater of (ia) $700.0 35.0 million (minus the amount of any permanent payment and commitment reductions) and (iib) $175.0 million plus 35.010% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Initial Notes to be issued on and the date of this Indenture Guarantees thereof and the Exchange Notes and the related Note GuaranteesGuarantees issued pursuant to a Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 4.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) 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, refundextend, refinance, renew, replace, defease or discharge any refund 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 was permitted by this Indenture to be incurred herein under Section 4.09(a) or clauses (2Section 4.09(b)(2), (3), (4), (5), (14) or (15) of this Section 4.09(b11);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if one of the Company or any Guarantor Issuers is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, 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 or if a Guarantor is the case obligor on such Indebtedness and neither of the CompanyIssuers nor another Guarantor is the obligee, or such Indebtedness must be expressly subordinated to the Note Guarantee, prior payment in full in cash of all Obligations with respect to the case Guarantee 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(8) the guarantee by either Issuer or any of the Guarantors of Indebtedness of an Issuer or any Guarantor that was permitted to be incurred under this Section 4.09;
(9) the Guarantee incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness obligations relating to net gas balancing positions arising in the ordinary course 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 business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(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 issued for the account of 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 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);
(11) Indebtedness of a Restricted Subsidiary incurred and outstanding on the incurrence 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 any (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 in incur $1.00 of its Restricted Subsidiaries additional Indebtedness under Section 4.09(a) hereof after giving effect to 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, so long as such Indebtedness is covered within five Business Dayspursuant to this clause (11);
(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 Indebtedness arising from agreements of the Company or any of its Restricted Subsidiary of the Company Subsidiaries providing for indemnification, adjustment of purchase price, earn outs, price 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; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of the balance sheet of gross proceeds actually received by the Company or any and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(1513) 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 (15), not to exceed the greater of $2.0 million.
(ic) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (1513) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09.
(d) 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 under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Company and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 other distributions on Preferred Stock or Disqualified Stock in the form of additional securities shares, units or the like 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 provided, in each such case, that the amount thereof shall be is included in Fixed Charges for purposes of determining the Consolidated Coverage Ratio of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other PersonCompany.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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”) incur any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any Preferred shares of preferred stock; PROVIDED, HOWEVER, the Company may issue Disqualified Stock; provided, however, that and the Issuers Company and any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock), if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which 40 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, as the case may be, issued would have been at least 2.25 2.00 to 1.01, 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.
(b) The provisions of Section 4.09(a) will shall 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”"PERMITTED DEBT"):
(1) the incurrence by the Issuers and the Guarantors, Company or any Guarantor of additional Indebtedness and letters of credit under one or more Credit Facilities in an Facilities; provided, however, that the aggregate principal amount at any one time outstanding under of all Indebtedness of the Company and the Guarantors incurred pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantor thereunder) does not exceed an amount equal to exceed $170.0 million less the greater aggregate amount of (i) $700.0 million all repayments of any Indebtedness under a Credit Facility that have been made by the Company and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on any Guarantor since the date of such incurrencethis Indenture with the proceeds of Asset Sales pursuant to the provisions described under the provisions of Section 4.12;
(2) the incurrence by the Company and its the Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Initial Notes to be issued on the date of this Indenture (and the related Note GuaranteesExchange Notes issued in exchange for any Notes issued under this Indenture);
(4) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary 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 or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 7.5 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds Net Proceeds of which are used to extend, defease, renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2), (3), (4), or (5), (14) or (15) of this Section 4.09(b)4.09;
(6) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided, however, that:
(A) if the Company or any a Guarantor is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the NotesNotes or the note guarantees, in as the case of the Company, or the Note Guarantee, in the case of a Guarantormay be; 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 Company or a Restricted Subsidiary of the Company and (ii) any subsequent sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations that are incurred in the normal course of business and consistent with past business practices for the 41 purpose of fixing or hedging currency, commodity or interest rate risk (including with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding in connection with the conduct of their respective businesses) and not for speculative purposes;
(9) 8) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 guaranteedcovenant;
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of represented by worker's compensation claims and other statutory or regulatory obligations, self-insurance obligations or obligations, tender, bid, plugging and abandonment, appeal, reimbursement, performance, governmental contract, surety or appeal bonds, standby letters of credit and similar bonds warranty and completion guarantees provided by contractual service obligations of like nature, trade letters of credit or documentary letters of credit, in each case to the extent incurred in the ordinary course of business of the Company or such Restricted Subsidiary;
(10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, contribution, earnout, adjustment of purchase price or similar Obligation, in each case, incurred or assumed in connection with the ordinary course disposition of business and any Guarantees business, assets or letters Capital Stock of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessa Restricted Subsidiary;
(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 fundsfunds in the ordinary course of business; provided, so long as however, that such Indebtedness is covered extinguished within five three Business DaysDays of incurrence;
(12) the incurrence of Indebtedness by foreign Subsidiaries of the Company in the aggregate principal amount (or accreted value, as applicable) at any time outstanding and incurred in reliance upon this clause (12) not to exceed $10.0 million; and
(13) 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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor 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 (15), outstanding not to exceed the greater of $10.0 million.
(ic) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. For purposes of determining compliance with this Section 4.09covenant, 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 (1513) above, above or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, in each case, as of the date of incurrence thereof, the Company will be permitted to divideshall, in its sole discretion, classify and (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. covenant and such Indebtedness shall be treated as having been incurred pursuant to such clauses or the first paragraph hereof, as the case may be, designated by the Company; provided, however, that any incurrences of Indebtedness under the Credit Agreement outstanding on the date on which Notes are Facilities must be first issued and authenticated under this Indenture will initially be deemed applied to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtabove. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of accreted value or amortization of original issue discount, liquidation preference and the payment of interest on any Indebtedness not secured by a Lien or dividends 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 shall 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Medvest Holdings Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will 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”"INCUR") any Indebtedness (including Acquired Debt), and the Company Issuer will not issue any Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Issuer and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred StockDisqualified Stock and the Guarantors may issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a4.10(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”"PERMITTED DEBT"):
(1a) the incurrence by the Issuers and the Guarantors, Issuer or 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 Company Issuer and its Restricted Subsidiaries the Guarantors thereunder) not to exceed $1.0 billion and (b) the incurrence by the Issuer or 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 (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 amount, if any, by which (ix) $700.0 million and (ii) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence exceeds (y) the aggregate amount of Indebtedness permitted to be incurred pursuant to the immediately preceding clause (a) as of the date of such incurrence, less, in the case of clause (a), 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(b)(1) and, in the case of each of clauses (a) and (b), less amounts outstanding under any Qualified Receivables Transactions;
(2) the incurrence by the Company and its Restricted Subsidiaries Issuer or any Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors its Restricted Subsidiaries of Indebtedness represented by the Notes to be issued on the date of this Indenture and related Note Guarantees, the Exchange Notes and the related Note Guarantees to be issued pursuant to the Registration Rights Agreement; and any Exchange Notes issued by the Issuer in exchange for Additional Notes, if any, issued in compliance with this Indenture and pursuant to a registered exchange offer and the related Note Guarantees;
(4) the incurrence by the Company 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 price, or cost of designconstruction or improvement, construction, installation of property (real or improvement of propertypersonal), plant or equipment used in the business of the Company Issuer or any of its Restricted Subsidiaries, Subsidiaries (whether through the direct acquisition of such assets or the acquisition of Equity Interests of any Person owning such assets) in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (ix) $45.0 30.0 million and or (iiy) 3.03% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceIssuer;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was is permitted by this Indenture to be incurred under Section 4.09(a4.10(a) or clauses (2), (3), (4), (5), (1415) or (1516) of this Section 4.09(b4.10(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company Issuer or any Guarantor is the obligor on such Indebtedness, and such Indebtedness and the payee is owed to a Restricted Subsidiary that 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 CompanyIssuer, 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 Company Issuer or a Restricted Subsidiary of the Company thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations 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;
(9) 8) the Guarantee by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company to the extent Issuer that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.10; provided that, in the case of a Guarantee of any Restricted Subsidiary that if 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 being guaranteed is subordinated to or pari passu in the form of additional Indebtedness with the Notessame terms, then and the Guarantee must be subordinated payment of dividends on Disqualified Stock or pari passu, as applicable, to preferred stock in the form of additional shares of the same extent 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 the Indebtedness guaranteedaccrued;
(10) the incurrence by the Company or any of its Restricted Issuer's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness in respect ceases to be Non-Recourse Debt of self-insurance obligations or bidan Unrestricted Subsidiary, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided such event shall be deemed to constitute an incurrence of Indebtedness 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 businessIssuer that was not permitted by this clause (10);
(11) the incurrence by the Company 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 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 Company Issuer or any such Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price 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 in a transaction permitted by this Indenturefor the purpose of financing such acquisition; provided that that:
(a) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company 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 noncash proceeds (the fair market value of those 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 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 Permitted Acquisition Indebtedness; andof 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 Company Issuer 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, replace, defease refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15), not to exceed the greater of (i) $75.0 million and million;
(ii16) 5.0% the incurrence by the Foreign Restricted Subsidiaries of the Company’s Adjusted Consolidated Net Tangible Assets determined as 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 date 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 clause (1), shall not exceed the maximum amount permitted under clause (1);
(18) contingent liabilities arising out of endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(19) 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);
(20) the incurrence of Indebtedness of the Issuer or issuanceany 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
(21) 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 4.094.10, in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1521) above, or is entitled to be incurred pursuant to Section 4.09(a4.10(a), the Company Issuer 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 portion of such item of Indebtednessand from time to time may reclassify, in any manner that complies with this Section 4.094.10 at such time. Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under of this Indenture will initially shall 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 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 pursuant 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person4.10(b)(1).
Appears in 1 contract
Sources: Indenture (Nortek Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company the Issuer will not, and 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Issuer’s 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.3(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 Issuers Issuer and the GuarantorsGuarantor of the Notes and Note Guarantee in the aggregate principal amount to be issued on the Closing Date 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);
(2) the incurrence by the Issuer or any of 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;
(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 (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 2.60 billion and (iiB) $175.0 million plus 35.0% 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 Company’s Adjusted Consolidated Net Tangible Assets determined on the date collateral securing Indebtedness under Credit Facilities contemplated by clause (A) of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
this clause (3) the incurrence by the Issuers and 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 Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge at any Indebtedness incurred pursuant to one time outstanding under this clause (4), 3)(B) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance1.5 billion;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 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 Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available applicable Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter periodReference Period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Restricted Subsidiary of Indebtedness and letters of credit under Credit Debt Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its the Restricted Subsidiaries thereunder) not to exceed the greater greatest of (ia) $700.0 650.0 million, (b) the sum of $50.0 million and (ii) $175.0 million plus 35.030.0% of the Company’s Adjusted Consolidated Net Tangible Assets and (c) the Borrowing Base as of the date of incurrence of such Indebtedness determined on as of the date of such incurrenceincurrence and after giving effect to the use of proceeds thereof; provided that any Indebtedness and letters of credit incurred pursuant to this clause (1) may be exchanged, renewed, refunded, refinanced, replaced, defeased or discharged if the principal amount (or accreted value, if applicable) of such new Indebtedness and letters of credit does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, exchanged, renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest and the amount of all fees and expenses, including premiums, incurred in connection therewith);
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and 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 GuaranteesIssue Date;
(4) the incurrence by the Company 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, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted SubsidiariesSubsidiaries (together with improvements, additions, accessions and contractual rights relating primarily thereto), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 50.0 million and (iib) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceand after giving effect to the use of proceeds thereof;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, 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 was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15), (16) or (1517) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not 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 Company, or the Note Guarantee, in the case of a Guarantor, then the incurrence of such Indebtedness; 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, in each case of clause (a) or clause (b), will be deemed, in each case, deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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:
(Aa) 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
(Bb) 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, 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 Company or any of its Restricted Subsidiaries of Hedging Obligations[reserved];
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to the Notes or pari passu with the Notesa Note Guarantee, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, 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 by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance 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) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil oil, natural gas liquid 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, contribution, adjustment of purchase price, earn 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 a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted SubsidiarySubsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(14) any Permitted Acquisition Indebtedness; and
(1516) 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 (1516), not to exceed the greater of (ia) $75.0 100.0 million and (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceissuance and after giving effect to the use of proceeds thereof; and
(17) the incurrence of additional Indebtedness by Restricted Subsidiaries that are not Guarantors and Indebtedness incurred by the Company or any Restricted Subsidiary on behalf of, or representing guarantees of Indebtedness of, Joint Ventures of the Company and any Restricted Subsidiary 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 the greater of (a) $50.0 million and (b) 3.0% of Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance and after giving effect to the use of proceeds thereof. The Company will not incur, and the Company 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 (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 greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. 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 (1Section 4.09(b)(1) through (1517) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Debt Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder 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 DebtDebt and may not later be reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, 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, 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 not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Oasis Petroleum Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 on the date on which such additional Indebtedness is incurred or such Disqualified Stock or such Preferred Stock preferred stock is issued, as the case may be, the Issuer's Consolidated Net Leverage Ratio would have been at least 2.25 not exceed 3.50 to 1.0, 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 the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of issued on such four-quarter perioddate.
(b) Section 4.09(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”"):
(1i) the incurrence of Indebtedness under (A)(i)Parent RCF Debt Obligations and (ii) (without double counting) any amounts borrowed under the Parent Revolving Credit Facility to the extent guaranteed by the Issuers and the GuarantorsIssuer or any Restricted Subsidiary, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderSection 4.09(b)(i)(A) not to exceed $300.0 million; and (B) Credit Facilities not described in Section 4.09(b)(i)(A) hereof in an aggregate principal amount at any one time outstanding under this Section 4.09(b)(i)(B) not to exceed U.S.$1,000.0 million, plus in the greater case of any refinancing of any Indebtedness permitted under these Sections 4.09(b)(i)(A) or (iB) $700.0 million or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing;
(ii) $175.0 million plus 35.0% Indebtedness outstanding on the Issue Date after giving pro forma effect to the Transactions and the use of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrencenet proceeds thereof (other than Indebtedness described in Sections 4.09(b)(i) and (iii) hereof);
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by the Senior Notes to be issued on the date of this Indenture (other than Additional Senior Notes) and the related Note Guarantees (including any future Note Guarantees);
(4iv) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by representing Capital Lease Obligations, mortgage financings or financings, purchase money obligations, in each case, obligations or other Indebtedness incurred for the purpose of financing all or any part of the purchase price price, lease expense, rental payments or cost of design, construction, installation or improvement of property, plant or equipment or other assets (including Capital Stock) used in the business of the Company Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred or issued to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 75.0 million and (ii) or 3.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date of such incurrence or issuanceIssuer at any time outstanding;
(5v) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section Sections 4.09(a), 4.09(b)(ii), 4.09(b)(iii), 4.09(b)(v) or clauses (2), (3), (4), (5), (144.09(b)(xiii) or (15) of this Section 4.09(b)hereof;
(6vi) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and Issuer or any of its Restricted SubsidiariesSubsidiary; provided, however, provided that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee obligee is not the Company 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 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)) expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Senior Notes, in the case of the CompanyIssuer, 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 Company Issuer or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.09(b)(vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries Subsidiary to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stockpreferred stock; provided, however, provided that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Issuer or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7Section 4.09(b)(vii);
(8) viii) the incurrence by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations not for speculative purposes (as determined in good faith by the Issuer or such Restricted Subsidiary, as the case may be);
(9ix) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company Issuer or a any Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesSenior Notes or a Note Guarantee, then the Guarantee guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10x) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations or bidobligations, plugging captive insurance companies, bankers' acceptances, performance 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;
(11xi) the incurrence by the Company Issuer 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 30 Business Days;
(12xii) the incurrence Indebtedness represented by the Company or guarantees of any of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course of businessManagement Advances;
(13xiii) Indebtedness of (A) any obligation 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 assumption of related liabilities) the Issuer or any Restricted Subsidiary (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 Restricted Subsidiary or was otherwise acquired by the Issuer or a Restricted Subsidiary or otherwise in connection with, or in contemplation of, such acquisition) or (B) the Issuer or any Restricted Subsidiary incurred in relation to any such acquisition, merger, consolidation, amalgamation or combination; provided, however, with respect to this Section 4.09(b)(xiii), that at the time of the acquisition or other transaction pursuant to which such Indebtedness was incurred or 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 after giving effect to the incurrence of such Indebtedness pursuant to this Section 4.09(b)(xiii) calculated on a pro forma basis or (y) the Consolidated Net Leverage Ratio would be equal or less than the Consolidated Net Leverage Ratio immediately prior to giving effect to such acquisition or other transaction on a pro forma basis;
(xiv) Indebtedness arising from agreements of the Company Issuer or any a Restricted Subsidiary of the Company providing for customary indemnification, adjustment obligations in respect of earnouts or other adjustments of purchase priceprice or, earn outsin each case, or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, business or assets or Capital Stock Person or any Equity Interests of a Subsidiary, provided that the maximum liability of the Issuer 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 (or held in escrow as collateral for such Indebtedness for later release to) the Issuer and its Restricted Subsidiaries in connection with such disposition;
(xv) Indebtedness of the Issuer and its Restricted Subsidiaries in respect of (A) 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 in respect of any governmental requirement 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, and (B) any customary cash management, cash pooling or netting or setting off arrangements, including customary credit card facilities, entered into in the ordinary course of business; provided, however, that upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing;
(xvi) (A) 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; (B) 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 Issuer and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Issuer and its Restricted Subsidiaries; and (C) 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 of bad debt purposes, in each case incurred or undertaken in the ordinary course of business;
(xvii) Indebtedness of the Issuer and the Guarantors in an aggregate outstanding principal amount which, when taken together with any Permitted Refinancing Indebtedness in respect thereof and the principal amount of all other Indebtedness incurred pursuant to this Section 4.09(b)(xvii) and then outstanding, will not exceed 100% of the net proceeds (other than proceeds from any Parent RCF Contribution) received by the Issuer from the issuance or sale (other than to a transaction permitted Restricted Subsidiary) of its Subordinated Shareholder Debt or Capital Stock (other than Disqualified Stock, Designated Preference Shares, Excluded Amounts or an Excluded Contribution) or otherwise contributed to the equity (other than through the issuance of Disqualified Stock, Designated Preference Shares, Excluded Amounts or an Excluded Contribution) of the Issuer, in each case, subsequent to the Issue Date; provided, however, that (i) any such net proceeds that are so received or contributed shall be excluded for purposes of making Restricted Payments under Section 4.07(a) hereof and Sections 4.07(b)(ii) and 4.07(b)(v) hereof to the extent the Issuer and its Restricted Subsidiaries incur Indebtedness in reliance thereon and (ii) any net proceeds that are so received or contributed shall be excluded for purposes of incurring Indebtedness pursuant to this Section 4.09(b)(xvii) to the extent the Issuer or any of its Restricted Subsidiaries makes a Restricted Payment under Section 4.07(a) hereof and Sections 4.07(b)(ii) and 4.07(b)(v) hereof in reliance thereon;
(xviii) guarantees by this Indenturethe Issuer or any Restricted Subsidiary granted to any trustee of any management equity plan or stock option plan or any other management or employee benefit or incentive plan or unit trust scheme approved by the Board of Directors of the Issuer, so long as the proceeds of the Indebtedness so guaranteed are used to purchase Equity Interests of the Issuer (other than Disqualified Stock); provided that the amount of any net cash proceeds from the sale of such Equity Interests of the Issuer will be excluded from Section 4.07(a)(v)(C)(2) hereof and will not be considered to be net cash proceeds from an Equity Offering for purposes of Section 3.07 hereof;
(xix) Indebtedness under daylight borrowing facilities incurred in connection with any refinancing of Indebtedness (including by way of set-off or exchange); provided that such obligation Indebtedness does not exceed the principal amount of the Indebtedness being refinanced and the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing, so long as any such Indebtedness is repaid within three days of the date on which such Indebtedness is incurred;
(xx) Indebtedness incurred by a Receivables Subsidiary in a Qualified Receivables Financing;
(xxi) Indebtedness incurred by the Issuer and any Restricted Subsidiary under local Credit Facilities in an aggregate principal amount at any one time outstanding under this clause this Section 4.09(b)(xxi), not reflected to exceed $25.0 million, plus in the case of any refinancing of any Indebtedness permitted under this Section 4.09(b)(xxi) or any portion thereof, the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing;
(xxii) any joint and several liability in respect of any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) as a liability on the face result of a fiscal unity (fiscale eenheid) in respect of the balance sheet of the Company Issuer or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; and
(15xxiii) the incurrence of Indebtedness under Land Leases entered into by the Company Issuer or any Restricted Subsidiary in the ordinary course of business; or
(xxiv) the incurrence of Indebtedness by the Issuer 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 (15Section 4.09(b)(xxiv), not to exceed the greater of (i) $75.0 million and (ii) 5.03.0% of the Company’s Adjusted Consolidated Net Tangible Total Assets determined as of the date Issuer at any time outstanding. provided that the amount of such incurrence Indebtedness incurred by any Restricted Subsidiary that is not a Guarantor in reliance on Sections 4.09(a) or issuance. (b)(xxiv) hereof shall be limited to the greater of U.S.$75.0 million and 3.0% of the Total Assets of the Issuer.
(c) For purposes of determining compliance with this Section 4.09, (i) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(i) through (154.09(b)(xxii) abovehereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company Issuer, in its sole discretion, 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 portion incurrence and only be required to include the amount and type of such item Indebtedness in one of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement outstanding such clauses and will be permitted 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.incurrence to divide and classify an i
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) Stock or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, issued would have been at least greater than 2.0 to 1 if such incurrence is on or prior to the first anniversary of the date of this Indenture and 2.25 to 1.01 if such incurrence is after such date, 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 the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunderthere-under) not to exceed $125.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to permanently repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by (i) the Notes to be and the related Subsidiary Guarantees issued on the date of this Indenture and (ii) the Exchange Notes and the related Note GuaranteesSubsidiary Guarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany inter-company Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(aparagraph (a) above or clauses clause (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b);paragraph; -61-
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany in-tercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Subsidiary 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, ; will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; provided that if the Indebtedness being guaranteed is subordinated in right of payment to or pari passu with the Notes, then the Guarantee must guarantee shall be subordinated or pari passu, as applicable, 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Tekni Plex Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or Preferred StockStock (other than to the Company or a Wholly Owned Subsidiary of the Company); provided, however, that the Issuers Company and its Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Company (but not any of its Subsidiaries) may incur Indebtedness (including Acquired Debt) or issue Preferred shares of Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company’s '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, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred 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.
(b) Section 4.09(a) will . The foregoing provisions shall not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):Indebtedness:
(1i) the incurrence by the Issuers and Company of Senior Debt under the Guarantors, of Indebtedness New Credit Facility and letters of credit under Credit Facilities thereunder in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit (other than Insurance Letters of Credit) being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed an amount equal to $100.0 million under the greater New Credit Facility less the aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied to permanently reduce the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of commitments with respect to such incurrenceIndebtedness pursuant to Section 4.10 hereof;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers and the Guarantors Company of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesNotes;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, purchase money obligationsobligations or Acquired Debt, in each case, case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5v) the incurrence in the ordinary course of business by the Company or any of its Subsidiaries of Indebtedness in respect of Insurance Letters of Credit;
(vi) the incurrence by any Subsidiary of the Company of Indebtedness under a Guarantee of any Indebtedness permitted under this Indenture to be incurred by the Company; provided that (a) in the case such Guarantee is of Indebtedness that is pari passu in right of payment with the Notes, all obligations with respect to the Notes are Guaranteed on an equal and ratable basis with the Indebtedness so Guaranteed, and (b) in the case such Guarantee is of Indebtedness that is subordinated in right of payment to the Notes, all obligations with respect to the Notes are Guaranteed on a senior basis reflecting the subordination of the Indebtedness so Guaranteed on terms substantially similar to, or more favorable to senior creditors than, those contained in this Indenture;
(vii) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness Debt in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)incurred;
(6viii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Wholly Owned Subsidiaries; provided, however, that:
that (Ax) if the Company or any Guarantor is the obligor on of such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured is evidenced by a note and expressly subordinated subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; andNotes and (y)
(B) (iI) any subsequent issuance issuance, transfer or transfer other disposition of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Wholly Owned Subsidiary of the Company and (iiII) any sale sale, transfer or other transfer disposition of any such Indebtedness to a Person that is not either the Company or a Restricted Wholly Owned Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided that is permitted by the Company or a Restricted Subsidiary in the ordinary course terms 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 businessthis Indenture to be outstanding;
(11x) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank in respect of bid, performance or other financial institution of a checkadvance payment bonds, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Daysand appeal and surety bonds;
(12xi) the incurrence by the Company of Indebtedness as part of the IRB Payment Even t;
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness (in addition 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 Indebtedness permitted by any other clause of 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;
(14paragraph) any Permitted Acquisition Indebtedness; and
(15) 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 outstandingoutstanding not to exceed $10.0 million; and
(xiii) the incurrence by the Company or any of its Subsidiaries of interest, including all Permitted Refinancing fees or other expenses on Indebtedness incurred to renewotherwise permitted under this covenant, refundprovided that such interest, refinance, replace, defease fees or discharge other expenses are payable on a current basis no less frequently than semi-annually and are paid when due or within any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15)applicable customary grace period thereafter, not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancethirty days. For purposes of determining compliance with this Section 4.09covenant, (i) in the event that an item of Indebtedness meets the criteria of more than one of the categories types of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to Section 4.09(a)Indebtedness permitted by this covenant, the Company in its sole discretion will be permitted to divide, classify and reclassify such item of Indebtedness on and will only be required to include the date amount and type of its incurrenceeach class of Indebtedness in the test specified in the first paragraph of this covenant or in one of the clauses of the second paragraph of this covenant; (ii) the amount of Indebtedness issued at a price which is less than the principal amount thereof shall be equal to the amount of liability in respect thereof determined in accordance with GAAP, or later redivide or reclassify all or a portion unless the Company shall elect upon written notice to the Trustee at the time of issuance of such item of Indebtedness, in any manner that complies with to qualify the extended principal amount or final accreted value thereof as permitted under the terms of this Section 4.09. 4.9; and (iii) the amount of Indebtedness under the Credit Agreement 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. 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 represented by a Lien in the form Guarantee of additional Indebtedness with the same terms, the reclassification a primary obligation 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 another Person shall be deemed to be the lower of (x) 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 shall be included in Fixed Charges of the Company as accrued equal to 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 maximum amount of the Indebtednessprimary obligation (including without limitation all principal, premiums (if any), interest, fees and all other amounts in the case of any other Indebtedness; and
(crespect thereof) in respect of Indebtedness which such Guarantee is made and (y) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of another Person secured by the applicable Guarantee, which, in any case in which such Guarantee consists solely of the granting of a Lien on the assets any asset of the specified such guaranteeing Person, shall be limited to the lesser of:
(1) the Fair Market Value fair market value of such assets at the date of determination; and
(2) the amount of the Indebtedness of the other Personasset.
Appears in 1 contract
Sources: Indenture (Loomis Fargo & Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries amount drawable thereunder) not to exceed the greater exceed, as of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the any date of such incurrence;, $250.0 million.
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantee to be issued on the date of this Supplemental Indenture and the related Note Guaranteesor thereafter as provided in this Supplemental Indenture;
(4) the incurrence by the 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 or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount 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 (4), not to exceed exceed, as of any date of incurrence, the greater of (ix) $45.0 85.0 million and (iiy) 3.04.25% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the such date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1521) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note 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 Company or a Restricted Subsidiary of the Company and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of Hedging ObligationsObligations or Treasury Management Arrangements in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 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, self-insurance obligations or obligations, bankers’ acceptances, performance, bid, plugging and abandonmentsurety, appeal, reimbursement, performance, surety remediation and similar bonds and completion guarantees Guarantees (not for borrowed money) 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;
(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 any Person incurred and outstanding on or prior to the incurrence by date on which such Person became a Restricted Subsidiary of the Company or was acquired by, or merged into or arranged or consolidated with, the Company or any of its Restricted Subsidiaries (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of in-kind obligations relating related transactions pursuant to net oil which such Person became a Restricted Subsidiary of or natural gas balancing positions arising was otherwise acquired by the Company); provided, however, that on the date that such Person became a Restricted Subsidiary or was otherwise acquired by the Company, either: (a) 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 clause (12); or (b) the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would have been greater than such ratio immediately prior to such acquisition, merger, arrangement or consolidation, in each case after giving effect to the ordinary course incurrence of businesssuch Indebtedness pursuant to this clause (12);
(13) Indebtedness consisting of unpaid insurance premiums owed to any obligation Person providing property, casualty, liability or other insurance to the Company or any Restricted Subsidiary in any fiscal year, pursuant to reimbursement or indemnification obligations to such Person; provided that such 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;
(14) Indebtedness of the Company, to the extent the net proceeds thereof are substantially concurrently (a) used to purchase Notes tendered in connection with a Change of Control Offer or (b) deposited to defease the Notes pursuant to Articles 8 hereof or pursuant to Article 11 hereof;
(15) Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, 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, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Subsidiary for the purpose of financing such acquisition;
(16) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;
(17) Indebtedness owed to a transaction permitted Person controlled or supervised by this Indenture; provided that such obligation is not reflected and acting as a liability on the face an agency or instrumentality of the balance sheet United States of America, Canada or Mexico in connection with the settlement or other resolution of any claim or dispute which may arise from time to time with any such agency;
(18) Indebtedness related to surety bonds or cash collateral posted by the Company or any of its Restricted Subsidiaries from time to time in order to secure reclamation obligations;
(19) Indebtedness of the Company or any of its Restricted SubsidiarySubsidiaries consisting of take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(1420) Indebtedness representing deferred compensation to employees of the Company or any Permitted Acquisition Indebtednessof its Restricted Subsidiaries in the ordinary course of business; and
(1521) 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 (1521), not to exceed exceed, as of any date of incurrence, the greater of (ix) $75.0 110.0 million and (iiy) 5.05.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the such date of incurrence. 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 incurrence Guarantor unless such Indebtedness will be contractually subordinated in right of payment to the Notes and the applicable Note Guarantee to at least the same extent as such other Indebtedness; 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 issuanceby 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 (1521) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. , Indebtedness under the Credit Agreement Facilities 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionspreferred stock dividends, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Stock preferred stock or Disqualified Stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued 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 incurred. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a22) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b23) with respect to contingent obligations, the maximum liability upon the occurrences of the contingency giving rise to the obligations;
(24) with respect to Hedging Obligations, the net amount payable, if any, by such Persons of such Hedging Obligations terminated at that time due to default by such Persons
(25) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c26) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries Guarantors thereunder) not to exceed the greater of (ia) $700.0 million 1.3 billion and (iib) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of (a) the Existing Indebtedness and (b) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture hereof and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the 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 price, other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (ia) $45.0 50.0 million and (iib) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease defease, discharge or discharge otherwise retire for value, in whole or in part, 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 was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not 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 Company, 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 Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, will be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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:
(Aa) 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
(Bb) 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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; 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 guaranteedguaranteed (or, at the Company’s election, to a greater extent);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-insurance obligations and other social security or similar legislation, old age pension or public liability obligations, statutory obligations, 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 by, or for the account of, the Company or a Restricted Subsidiary in the ordinary course of business and any Guarantees Guarantees, contingent reimbursement obligations, bank guarantees or letters of credit functioning as or as, supporting any or issued to assure payment or performance of the foregoing bonds or obligations and workers’ compensation compensation, health, disability or other benefits, unemployment or other insurance 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) 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, contribution, adjustment of purchase price, earn 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 a Restricted Subsidiary in a transaction permitted hereby;
(14) the incurrence by this Indenture; provided that such obligation is not reflected as a liability on the face Company or any of its Restricted Subsidiaries of Indebtedness in respect of the balance sheet financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness representing deferred compensation to employees of the Company or any Restricted SubsidiarySubsidiary of the Company incurred in the ordinary course of business (including those incurred in connection with any acquisition);
(14) any Permitted Acquisition Indebtedness; and
(1516) 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 (1516), not to exceed the greater of (i) $75.0 150.0 million and (ii) 5.04.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(17) 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; and
(18) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary 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 Joint Venture and not as guarantor of such Indebtedness if, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this clause (18)(a) and then outstanding does not exceed $25.0 million, or (b) the pledge of (or a Guarantee limited in recourse solely to) Equity Interests in such Unrestricted Subsidiary or Joint Venture held by the 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 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 (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 greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. 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 (1Section 4.09(b)(1) through (1518) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder 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 or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, 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, 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 not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided that the amount thereof shall be is included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Diamondback Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 2.5 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed $150.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company’s Adjusted Consolidated Net Tangible Assets determined on Company or any of its Restricted Subsidiaries since the date of such incurrencethis Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture (which, for the avoidance of doubt, excludes any Additional Notes) and the Exchange Notes and the related Note GuaranteesGuarantees to be issued in exchange therefor in accordance with the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation installation, improvement or improvement lease of propertyproperty (real or personal), plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) 4.09 hereof or clauses (2), (3), (4), (5), (149), (10) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(Bb) (ix) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (iiy) any sale or other transfer of any such Indebtedness 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 incurrence of such Indebtedness by the 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 Stockshares of preferred stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(Bb) any sale or other transfer of any such Preferred Stock 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations provided that such Hedging Obligations are entered into, in the reasonable judgment of the Company, to protect the Company and its Restricted Subsidiaries from fluctuations in the applicable rates and not for purposes of speculation;
(9) the Guarantee incurrence by the Company of the Senior Subordinated Convertible Notes in an aggregate principal amount not to exceed $150.0 million;
(10) the incurrence by a Restricted Subsidiary of the Company of Acquired Debt that was outstanding on the date that such Restricted Subsidiary was acquired, directly or indirectly, by the Company; provided that (a) such Restricted Subsidiary incurred such Indebtedness prior to the date that the Company directly or indirectly acquired such Restricted Subsidiary, (b) such Indebtedness was not incurred in connection with, or in contemplation of, such acquisition and (c) the Company’s Fixed Charge Coverage Ratio immediately following such acquisition and incurrence would be not less than the Company’s Fixed Charge Coverage Ratio immediately prior to such acquisition and incurrence;
(11) 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, “earn out,” stock-price guarantee or similar obligations, in each case, incurred in connection with the acquisition or disposition of any Permitted Business, assets used or useful in a Permitted Business 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 Permitted Business, assets or Restricted Subsidiary for the purposes of financing such acquisition; provided that, with respect to any such disposition, the maximum aggregate liability in respect of all such Indebtedness will at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
(12) the guarantee by the Company or any of the Guarantors 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1013) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, performance 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 required from time to time by law or supporting any of the foregoing bonds state licensing or obligations and workers’ compensation claims in the ordinary course of businessregulatory authorities;
(1114) 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;
(1215) the incurrence by the Company or any Guarantor of unsecured Indebtedness evidenced by promissory notes that are subordinated in right of payment to the Notes issued to current, future or former directors, officers, employees or consultants of the Company or any of its Restricted Subsidiaries (or their respective spouses) in lieu of cash payments for Equity Interests being repurchased from such Person; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of in-kind obligations relating to net oil or natural gas balancing positions arising in additional Indebtedness, the ordinary course of business;
(13) issuance by 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 Disqualified 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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company a Guarantor of any Disqualified 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 incurred or Disqualified Stock issued pursuant to this clause (1516), not to exceed the greater $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 (i) $75.0 million and (ii) 5.0% payment to any other Indebtedness of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the date 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 such incurrence payment to any other Indebtedness solely by virtue of being unsecured or issuanceby 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 proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1516) above, above or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued 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 the extent required by the definition this Section 4.09 shall not be deemed to be exceeded solely as a result of such termfluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Fti Consulting Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Interest Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers and the GuarantorsCompany or any of its Restricted Subsidiaries of Priority Lien Debt, of Indebtedness and Junior Lien Debt or unsecured Indebtedness, under letters of credit under or any one or more indentures or other Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) 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 (i) $700.0 million and (ii) $175.0 million plus 35.0% any net proceeds therefrom within 35 days of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence) the Priority Lien Cap;
(2) the incurrence by the Company and or any 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 Existing Indebtednessapplication of any net proceeds therefrom within 35 days of the date of such incurrence) $550.0 million;
(3) the incurrence by the Issuers and the Guarantors 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 under this clause (3) and after giving pro forma effect to the 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 clause (3) shall not exceed the Permitted ABL Lien U.S. Cap;
(4) the incurrence by the Notes 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 date of this Indenture and the related Note GuaranteesIssue Date or pursuant to Section 4.16 hereof;
(46) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (46), not to exceed the greater of (ia) $45.0 75.0 million and (iib) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as consolidated total assets of the date Company and its Restricted Subsidiaries (measured at the time of such incurrence or issuanceincurrence);
(57) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness 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) of the Company or any of its Restricted Subsidiaries or any , Disqualified Stock of the Company, in each case or preferred stock) that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (54)-(7), (14), (15) or (1523) of this Section 4.09(b);
(6) 8) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the such Guarantor's 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) the issuance by any of the Company’s 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (79);
(8) 10) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(911) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 NotesNotes or any Note Guarantee, then the Guarantee guarantee must be subordinated or pari passu, as applicable, to the Notes and/or such Note Guarantee, as applicable, to the same extent as the Indebtedness guaranteed;
(1012) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of self-workers' compensation claims, self- insurance obligations or obligations, bankers' acceptances, performance, bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and customs bonds, 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 similar obligations and workers’ compensation claims in the ordinary course of business;
(1113) 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;
(1214) 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 Restricted Subsidiaries 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 in-kind obligations relating to net oil or natural gas balancing positions arising in the ordinary course date of businesssuch incurrence;
(1317) any obligation Indebtedness arising from agreements of the Company or any a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or acquisition 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 in a transaction permitted by this Indenture; provided that such obligation is not reflected as a liability on the face of the balance sheet to any current or former officer, director, employee or consultant of the Company or any Restricted Subsidiaryof 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;
(1419) any Permitted Acquisition Indebtedness; andIndebtedness 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;
(1520) 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; 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;
(22) the incurrence by the Company or any of its Restricted Subsidiaries of letters of credit in existence on the Issue Date and additional Indebtedness letters of 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 the issuance by the Company or any of any 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 valuevalue or amount, 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 (1523), not to exceed the greater of (ia) $75.0 250.0 million and or (iib) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as consolidated total assets of the date Company and its Restricted Subsidiaries (measured at the time of such incurrence incurrence).
(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 issuancesuch 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. Notwithstanding any of the foregoing to the contrary, the Company will not issue, and will not permit any Guarantor to issue, any Series of 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 (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 Company or any Guarantor issues (x) Priority Lien Debt with a maturity date on or prior to October 15, 2014 or (y) Junior Lien Debt with a maturity date on or prior to September 15, 2015, to any Person, the Company or such Guarantor shall, prior to issuing such 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.
(d) For purposes of determining compliance with this Section 4.09, ,
(1) 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 (1523) of Section 4.09(b) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under ; provided that the Credit Agreement outstanding First Lien Notes issued on the date Issue Date will be deemed to be outstanding under Section 4.09(b)(1) hereof and the Initial Notes will be deemed to be outstanding under Section 4.09(b)(2) hereof;
(2) 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 Sections 4.09(a) and 4.09(b) hereof (except with respect to the Initial Notes and the First Lien Notes issued on which Notes are first issued and authenticated under this Indenture the Issue Date, as provided in Section 4.09(d)(1) above);
(3) letters of credit will initially be deemed to have been incurred on such date in reliance on a principal amount equal to the exception provided by clause (1) of the definition of 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges maximum potential liability of the Company as accrued to 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 discountand its Restricted Subsidiaries thereunder;
(b4) Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the principal determination of a particular amount of the Indebtedness, in the case of any other IndebtednessIndebtedness shall not be included; and
(c5) in with respect to any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness of another Person secured by denominated in 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.foreign currency shall be calculate
Appears in 1 contract
Sources: Indenture (Unisys Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock Stock, and the Company will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any Preferred Stockpreferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio if, 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 or such Preferred Stock preferred stock is issued, as the case may be, Fixed Charge Coverage Ratio would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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”):) or the issuance of any Disqualified Stock or preferred securities described below:
(1) the incurrence by the Issuers and the Guarantors, Company or any of its Restricted Subsidiaries of additional Indebtedness (including guarantees and letters of credit credit) under one or more Credit Facilities in an providing for revolving credit facilities (including asset based lending revolving credit facilities) and/or term loan facilities with lenders that include commercial banks; provided that, (i) after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) and then outstanding does not to exceed the greater of (ia) $700.0 250.0 million and (b) the Borrowing Base and (ii) the aggregate principal amount outstanding under any such Credit Facility not constituting an ABL Facility shall not exceed $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence250.0 million;
(2) the incurrence by the Company and or its Restricted Subsidiaries of the Existing Indebtedness;, including the Existing Convertible Notes and related guarantees
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by (a) the Initial Notes to be issued on the date of this Indenture and the related Note GuaranteesGuarantees and (b) other Pari Passu Notes Lien Indebtedness; provided, that, at the time of incurrence thereof and after giving pro forma effect thereto, the Consolidated Secured Leverage Ratio would be no greater than 2.5 to 1.0;
(4) the incurrence by the 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 or cost of design, construction, installation installation, repair or improvement of propertyproperty (real or personal), plant or equipment or other assets used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted Subsidiaries, in an aggregate principal amount outstandingPerson owning such assets), including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge 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 the greater of (ia) $45.0 60.0 million and (iib) 3.03.75% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of at such incurrence or issuancetime;
(5) 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 renewto, refundextend, refinance, renew, replace, defease or discharge any refund 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 was permitted by this Indenture hereunder to be incurred or Disqualified Stock or preferred stock permitted to be issued under Section 4.09(a) hereof or clauses clause (2) (excluding the Existing Convertible Notes), (3), (4), (5), (1411) or (1518) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee a Guarantor is not the Company or a Guarantorobligee, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due 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 Guarantee of the Company, or the Note Guarantee, in the case of a such 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company, Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted Subsidiaries of obligations under Hedging Contracts in the ordinary course of business and not for speculative purposes, including any obligations with respect to letters of credit issued in connection therewith;
(8) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or any of its Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09;
(9) 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);
(10) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any Preferred Stockpreferred securities; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 Stock preferred securities to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an issuance of such Preferred Stock preferred securities by such Restricted Subsidiary that was not permitted by this clause (74.09(b)(10);
(8) the incurrence by the Company i) Indebtedness, Disqualified Stock or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness preferred stock of the Company or a Restricted Subsidiary of the Company incurred or issued to the extent that the guaranteed Indebtedness was permitted to be finance an acquisition or merger or (ii) Acquired Debt 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 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 Subsidiary; provided that, in either case, after giving effect to the ordinary course of business and any Guarantees related merger 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;
acquisition transaction, on a pro forma basis, either (11a) the incurrence by 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 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 would not be less than immediately prior to such Indebtedness is covered within five Business Daystransactions;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of inadditional 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 (12), does not exceed, at any one time outstanding, the greater of $100.0 million and 6.25% of the Company’s Consolidated Net Tangible Assets at such time;
(13) Indebtedness of the Company or any Restricted Subsidiary of the Company consisting of self-kind insurance obligations, financing of insurance premiums, obligations relating to net oil pay insurance premiums or natural gas balancing positions arising take-or-pay obligations contained in supply arrangements incurred in the ordinary course of business;
(1314) Indebtedness in respect of any obligation 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 feedstock in the ordinary course of business and/or (b) pursuant to letters of credit in connection with the purchase of foreign feedstock;
(15) 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;
(16) the incurrence by the Company or any of the Guarantors of Indebtedness (including Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations), in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation, repair or improvement of property (real or personal), plant or equipment or other assets (including bulk liquid storage tanks and associated infrastructure (including common piping, dedicated piping, pumps, process equipment, and instrumentation for the storage, handling and movement of Specified Products), docks or rundown pipelines to or from the foregoing, in each case, with respect only to the renewable diesel biorefinery of the Company or a Guarantor located in Geismar, Louisiana), including all Permitted Refinancing Indebtedness incurred to extend, refinance, renew, replace, defease or refund any Indebtedness incurred pursuant to this clause (16); provided that after giving effect to any such incurrence, the principal amount of all Indebtedness incurred pursuant to this clause (16) and then outstanding does not exceed $250.0 million;
(17) 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;
(18) Indebtedness arising from agreements of the Company or any Restricted Subsidiary of the Company providing for indemnification, holdback, adjustment of purchase price, earn outs, out or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock 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 Subsidiary Subsidiaries in a transaction permitted by this Indenture; provided that connection with such obligation is not reflected as a liability on the face of the balance sheet disposition;
(19) Indebtedness of the Company or any of the Restricted Subsidiary;
(14) Subsidiaries undertaken in connection with cash management and related activities with respect to any Permitted Acquisition IndebtednessSubsidiary or Joint Venture in the ordinary course of business; and
(1520) the incurrence by the Company or any of its Restricted Subsidiaries of additional Subsidiary that is not a Guarantor may incur Indebtedness or the issuance by the Company issue shares of any Disqualified Stock or preferred stock in excess of an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refundextend, refinance, renew, replace, defease or discharge refund any Indebtedness incurred or Disqualified Stock issued pursuant to under this clause (1520), not to exceed exceed, after giving pro forma effect to such incurrence or issuance (including pro forma effect to the application of the net proceeds therefrom), the greater of (i) $75.0 50.0 million and (ii) 5.03.25% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of at such incurrence or issuancetime. 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 (1520) 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 and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all in whole or a portion of in part in its sole discretion) such item of Indebtedness, Disqualified Stock or preferred stock in any manner that complies with this Section 4.094.09 (including in part pursuant to one or more clauses and/or in part pursuant to Section 4.09(a) hereof). Any Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued Initial ABL Facility shall be considered incurred under Section 4.09(b)(1) hereof and authenticated under this Indenture will initially may not be deemed later classified or reclassified pursuant to have been incurred on such date in reliance on the exception provided by clause Section 4.09(a) hereof.
(1c) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided that, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company as accrued accrued. Further, the accounting reclassification of any obligation of the Company or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness 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, in each case, supporting Indebtedness otherwise included in the determination of such particular amount, will not be included. In addition, notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that may be incurred pursuant to this Section 4.09 will not be deemed to be exceeded, with respect to any outstanding Indebtedness, due solely to the extent required by result of fluctuations in the definition exchange rates of such termcurrencies. The principal amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the incurred to refinance other Indebtedness, if incurred in a different currency from the case of any Indebtedness issued with original issue discount;
(b) the principal amount of the Indebtednessbeing refinanced, in the case of any other Indebtedness; and
(c) in respect of Indebtedness of another Person secured by a Lien shall be calculated based on the assets of currency exchange rate applicable to the specified Person, the lesser of:
(1) the Fair Market Value of currencies in which such assets at respective Indebtedness is denominated that is in effect on the date of determination; and
(2) the amount of the Indebtedness of the other Personsuch refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the Company’s '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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, and the proceeds thereof applied at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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) (a) the incurrence by the Issuers Company and the Guarantors, any Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder1)(a) not to exceed $85.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Asset Sales applied by the Company or any of its Restricted Subsidiaries of since the Issue Date to permanently repay any term Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 4.09Credit Facility; 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 Company or any of its Restricted Subsidiaries amount 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will Credit Facilities in accordance with this clause (1)(a) shall be in addition to any Indebtedness permitted to divide, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under be incurred pursuant to the Credit Agreement 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 Facilities in reliance on the exception provided by clause (1) of the definition of 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 principleson, 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
accordance with, clauses (a4) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
and (b15) the principal amount of the Indebtedness, in the case of any other Indebtednessbelow; 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
Sources: Indenture (Stanadyne Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and 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 Company Parent will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyParent’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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock 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 (including Acquired Debt) and preferred stock that the Parent’s non-Guarantor Restricted Subsidiaries (other than the Company) may incur under this paragraph 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 exists at the time of such change, and is not theretofore classified as Indebtedness, becoming Indebtedness shall not be deemed an incurrence of such Indebtedness.
(b) The provisions of Section 4.09(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 Issuers Company and the GuarantorsGuarantors of additional Indebtedness, of including revolving credit Indebtedness, term loan Indebtedness and letters of credit credit, under one or more Credit Facilities in an 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 shall not exceed the greater of (x) $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) (with letters of credit being deemed to have a principal ), the amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed Borrowing Base will be determined on the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined 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), and, if such test is satisfied with respect thereto at such time, any borrowing or reborrowing thereunder will be permitted irrespective of the amount of the Borrowing Base at the time of any borrowing or reborrowing (other than to the extent the Company or a Guarantor utilizes this clause (1) to incur other Indebtedness);
(2) the incurrence by the Company and Parent or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 Company 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 price, lease or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company Parent or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this clause (4), not to exceed the greater of (ix) $45.0 50.0 million and (iiy) 3.07.50% of the CompanyParent’s Adjusted Consolidated Tangible Net Tangible Assets determined as of the date of such incurrence or issuanceWorth;
(5) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2Sections 4.09(b)(2), (34.09(b)(3), 4.09(b)(5) or 4.09(b)(16) hereof, including additional Indebtedness, Disqualified Stock or preferred stock incurred to pay premiums (4including reasonable tender premiums), (5), (14) or (15) of this Section 4.09(b)defeasance costs and fees in connection therewith;
(6) the incurrence by the Company Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company Parent or a Restricted Subsidiary of the Company Parent and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyParent’s Restricted Subsidiaries to the Company Parent or to any of its the Parent’s Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Parent or a Restricted Subsidiary of the CompanyParent; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Parent or a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Parent or any of its Restricted Subsidiaries of Indebtedness of the Company Parent or a Restricted Subsidiary of the Company 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 Company 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 or obligations, bankers’ acceptances, bid, plugging and abandonment, appeal, reimbursement, performance, performance and 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 similar obligations and workers’ compensation claims or in the ordinary course respect of businessawards or judgments not resulting in an Event of Default;
(1112) the incurrence by the Company 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 Daysbusiness days or arising in connection with endorsements of instruments for deposit;
(1213) the incurrence by the Company or any Indebtedness, other than in respect of its Restricted Subsidiaries of in-kind obligations relating to net oil or natural gas balancing positions arising borrowed money and incurred in the ordinary course of business;
business (13) any obligation arising from agreements 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 Company Parent or any a 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 SubsidiaryParent);
(14) Indebtedness representing deferred compensation to employees of the Parent, the Company or any Permitted Acquisition Indebtedness; andother Restricted Subsidiary of the Parent;
(15) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional the Parent of Indebtedness or the issuance by the Company of any Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at any time outstandingoutstanding pursuant to this clause (15) not to exceed $15.0 million (or the equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency), 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 (15Section 4.09(b)(15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Forestar Group Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified StockStock or preferred stock if the Leverage Ratio at the time (the “Calculation Time”) at which such additional Indebtedness is incurred or (if applicable) such Disqualified Stock or preferred stock is issued would have been no greater than 4.25 to 1.00, and the Guarantors may incur Indebtedness determined on a pro forma basis (including Acquired Debta pro forma application of the net proceeds therefrom) or issue Preferred Stock, as if the Fixed Charge Coverage Ratio for additional Indebtedness had been incurred or (if applicable) the Disqualified Stock or preferred stock had been issued at the beginning of 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 or such Preferred Stock is issued, as Calculation Time (the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom“Leverage Ratio Test”), 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.
(b) The provisions of Section 4.09(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 Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(32) the incurrence by the Issuers Company and the Guarantors of (a) Indebtedness represented by the Notes to be and the related Note Guarantees issued on the date of this Indenture and (b) Indebtedness represented by the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(43) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingat any time outstanding under this clause (3), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (43), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of amount outstanding on the date of such incurrence or issuancethis Indenture plus $150.0 million;
(54) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany IndebtednessIndebtedness and, to the extent such Permitted Refinancing Indebtedness would prevent Impsat Colombia from at any time becoming a Guarantor, the Colombia Notes) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (1), (2), (3), (4), (513), (14), (16), (17) or (1518) of this Section 4.09(b);
(65) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Guarantor; and
(B) that (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any shares of Qualified Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock 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 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 preferred stock by such Restricted Subsidiary that was not permitted by this clause (6);
(7)) 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 disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness will 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 such Restricted Subsidiary in connection with such disposition;
(8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company 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 NotesNotes or any Note Guarantee, then the Guarantee must 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 or bidobligations, plugging and abandonmentbankers’ acceptances, appeal, reimbursement, performanceperformance bonds, surety bonds 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;
(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 Indebtedness of the Company or any of its Restricted Subsidiaries consisting of in(x) the financing of insurance premiums or (y) take-kind or-pay obligations relating to net oil or natural gas balancing positions arising contained in supply arrangements in the ordinary course of business;
(13) any obligation arising from agreements Acquired Debt 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; and
(15) the incurrence by the Company or any of its Restricted Subsidiaries assumed or acquired in connection with a transaction governed by, and effected in accordance with, Section 5.01 hereof; provided, however, that such Indebtedness was not incurred in connection with, or in contemplation of, such transaction;
(14) Indebtedness of additional Indebtedness a Restricted Subsidiary of the Company incurred and outstanding on or prior to the issuance 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 any Disqualified Stock related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary of the Company) in an aggregate principal amount (or accreted value, as applicable) at any time outstandingoutstanding pursuant to this clause (14), 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 (1514), not to exceed $25.0 million;
(15) the greater incurrence by the Company or any Guarantor of additional revolving credit Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i15) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder) not to exceed $75.0 million and million;
(ii16) 5.0% the incurrence by the Company or any Guarantor of Indebtedness owing to any Unrestricted Subsidiary in an aggregate principal amount at any time outstanding pursuant to this clause (16), 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 $50.0 million; provided that any Indebtedness outstanding under this clause (16) is not secured by a Lien;
(17) the incurrence by the Company or any Guarantor of any Deeply Subordinated Debt in an aggregate principal amount (or accreted value, as applicable) at any time outstanding pursuant to this clause (17), 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 $150.0 million; and
(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 pursuant to this clause (18), 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 $35.0 million.
(c) Notwithstanding the foregoing, the counterparty in respect of any Hedging Obligation secured by a Lien entered into by the Company or any of its Restricted Subsidiaries may not be an Affiliate of the Company’s Adjusted Consolidated Net Tangible Assets determined as Company or any such Restricted Subsidiary.
(d) 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 date Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence 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 issuance. any Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(e) 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 (1518) aboveof Section 4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 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 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. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock in the form of additional securities shares of the same class of Preferred Disqualified Stock or Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion, amortization or payment (other than with respect to Deeply Subordinated Debt) is included in Fixed Charges of the Company as accrued and that any such outstanding additional Indebtedness or Disqualified Stock or preferred stock is counted as Indebtedness for purposes of determining the Leverage Ratio.
(f) With respect to any U.S. dollar-denominated restriction on the extent required by incurrence of Indebtedness, the definition U.S. dollar equivalent principal amount (or accreted value, as applicable) 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 Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to renew, refund, refinance, replace, defease or discharge other Indebtedness denominated in a foreign currency, and such renewal, refunding, refinancing, replacement, defeasance or discharge would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date thereof, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount (or accreted value, as applicable) of such term. Indebtedness does not exceed the principal amount (or accreted value, as applicable) of such Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.
(g) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary of the Company may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in currency exchange rates or currency values.
(h) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Global Crossing LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company the Issuer will not, and 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Issuer’s 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4A.03(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) Indebtedness incurred under this Indenture 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);
(2) the incurrence by Parent and its Restricted Subsidiaries of the Existing Indebtedness and any Indebtedness that is incurred pursuant to or (to the extent not materially less favorable to the Issuer) in lieu of a commitment in existence as of the Closing Date;
(3) the incurrence by the Issuers and the Guarantors, 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 (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 1.75 billion and (iiB) $175.0 million plus 35.0% 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 Company’s Adjusted Consolidated Net Tangible Assets determined on collateral securing Indebtedness under Credit Facilities contemplated by clause (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 date maximum potential liability of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3thereunder) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes not to be issued on the date of this Indenture and the related Note Guaranteesexceed $1.5 billion;
(4) the incurrence by the Company 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 or cost of design, construction, installation or improvement of property, plant or equipment (including without limitation airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Company Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, extend, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a4A.03(a) or clauses (2), (3), (4), (5), (146), (13), (20), (21) (24) or (1525) of this Section 4.09(b)4A.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 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 Company 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 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 Company and Issuer and/or any of its Restricted Subsidiaries; provided, however, that:
(A) if either the Company Guarantor or any Guarantor the Issuer is the obligor on such Indebtedness and the payee is not the Company Guarantor or a Guarantorthe Issuer, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations obligations of the Issuer then due with respect to the NotesSecurities, in the case of the CompanyIssuer, or the Note Guaranteeall Guarantor Obligations then due, in the case of a the 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 Company Issuer or a Restricted Subsidiary of the Company Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each casecase under this clause (B), to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any Restricted Subsidiaries of the Company’s Restricted Subsidiaries Issuer to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company Issuer or a Restricted Subsidiary of the CompanyIssuer; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee guarantee by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries the Issuer of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094A.03; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesSecurities, then the Guarantee such guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations, 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 obligations to airport and governmental authorities);
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of selfany 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 24 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 12-insurance 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 bid, plugging and abandonment, appeal, reimbursement, performance, documentary letters of credit or banker’s acceptances;
(16) surety and similar appeal bonds and completion guarantees provided by that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Company Issuer or a any of its Restricted Subsidiary 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 Guarantees other Subsidiary of the Issuer or letters their assets (other than such Receivables Subsidiary and its assets and, as to the Issuer or any other Subsidiary of credit functioning as the Issuer, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Issuer or supporting any of its Restricted Subsidiaries owed to one or more Persons in connection with the foregoing bonds or obligations and workers’ compensation claims financing of insurance premiums in the ordinary course of business;
(1120) 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 Company Issuer or any Restricted Subsidiary of Indebtedness and letters of credit (and reimbursement obligations with respect thereto) secured by a Junior Lien on the “Collateral” (as defined in the Revolving Credit Agreement), 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 Issuer or any Restricted Subsidiary thereunder and including all other Indebtedness permitted to be incurred under this clause (21) that will be outstanding after such incurrence and the application of the proceeds therefrom), not to exceed the Junior Lien Cap (as defined in the Revolving Credit Agreement);
(22) Indebtedness arising from agreements of the Issuer 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 Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andof 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 the applicable Restricted Subsidiary of the Issuer;
(1524) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all obligations of the Issuer with respect to the Securities and the Guarantor Obligations on terms not materially less favorable to the Holders 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 obligations of the issuance by Issuer with respect to the Company Securities and the Guarantor Obligations and convertible into common stock of any Disqualified Stock in an the Issuer; provided that the aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not exceed $500.0 million at any time outstanding; and
(25) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance1.0 billion, at any time outstanding. For purposes of determining compliance with this Section 4.094A.03, in the event that if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1525) above, of Section 4A.03(b) hereof or is entitled to be incurred pursuant to Section 4.09(a)4A.03(a) hereof, the Company Issuer 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4A.03; provided that the term “Existing Indebtedness” will not include any Indebtedness that is permitted to be incurred under the Credit Agreement 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 clauses (1) or (3) of this Section 4A.03(b). None of the definition following will constitute an incurrence of Permitted Debt. The Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4A.03:
(1) the accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, preferred stock dividends;
(2) the accretion or amortization of original issue discount, ;
(3) the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, ;
(4) the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and ; and
(5) the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will 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 incurred. Notwithstanding any other provision of this Section 4A.03, the maximum amount of Indebtedness that the Issuer or any of its Restricted Subsidiaries may incur pursuant to this Section 4A.03 shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness fluctuations in exchange rates or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such termcurrency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the IndebtednessIndebtedness as of such date, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the IndebtednessIndebtedness as of such date, in the case of any other Indebtedness; and
(c3) 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.P
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(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 Issuers and the GuarantorsRestricted Subsidiaries, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 2.0 billion, (ii) $175.0 million plus the Borrowing Base in effect under the Credit Agreement at such time, and (iii) 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 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 or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 250.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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 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 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;
(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 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; and
(15) 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 (15), not to exceed the greater of (i) $75.0 450.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Parsley Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 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 Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 The incurrence by the Issuers Company and any Restricted Subsidiary of the Guarantors, Company of Indebtedness and letters of credit and bankers’ acceptances under Credit Facilities Facilities, and Guarantees in respect of such Indebtedness, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater sum of (ia) $700.0 million 2.4 billion and (iib) $175.0 million plus 35.0% an additional amount after all amounts have been incurred under clause (1)(a), if after giving pro forma effect to the incurrence of such additional amount and the application of the Company’s Adjusted Consolidated Net Tangible Assets determined on proceeds therefrom, the date Secured Leverage Ratio would be no greater than 3.50 to 1.00 outstanding at any one time (with all Indebtedness incurred under this clause (1)(b) deemed to be Secured Indebtedness for purposes of such incurrencecalculating the Secured Leverage Ratio), and any Permitted Refinancing Indebtedness in respect thereof;
(2) the The incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (1) and (3) of this Section 4.09(b));
(3) the The incurrence by the Issuers Company and 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 GuaranteesIssue Date;
(4) the incurrence Indebtedness (i) incurred by the Company or any of its Restricted Subsidiaries of Subsidiaries, including Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligationsobligations (including such Indebtedness as lessee or guarantor), in each case, incurred for the purpose of financing all or any part of the purchase price acquisition, lease or cost of design, construction, installation or improvement of property, plant or equipment used or useful in a Permitted Business, whether through the business direct purchase of assets or the Company or Capital Stock of any of its Restricted SubsidiariesPerson owning such assets, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 135.0 million and (b) 2.0% of Total Assets at the time of incurrence, at any one time outstanding and (ii) 3.0arising out of Sale and Leaseback Transactions not to exceed the greater of (a) $135.0 million and (b) 2.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of the date of such incurrence or issuanceincurrence, at any one time outstanding;
(5) the The incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), this clause (45) or clauses (9), (5), (1413) or (1514) of this Section 4.09(b);
(6) the The incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company Company, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence issuance of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the The issuance by any of the Company’s Restricted Subsidiaries to the Company or to any Restricted Subsidiary of its Restricted Subsidiaries the Company of any 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 The incurrence by the Company or any of its the Company’s Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the The Guarantee by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company Company, in each case, 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 The incurrence by the Company or any of its the Company’s Restricted Subsidiaries of Indebtedness in respect of letters of credit, bank guarantees, workers’ compensation claims, health, disability or other employee benefits, property, casualty or liability insurance, self-insurance obligations or obligations, bankers’ acceptances, guarantees, performance, surety, statutory, judgment, bid, plugging and abandonment, appeal, reimbursementcompletion, performanceexport or import, surety and indemnities, advance payment (including progress premiums), customs, value added or other tax or other guarantees, discounted bills of exchange, discounting or factoring of receivables or payables for credit management purposes, warehouse receipts, revenue bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary instruments in the ordinary course of business and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds consistent with past practice, including guarantees or obligations and workers’ compensation claims with respect thereto (in the ordinary course of businesseach case other than for an obligation for money borrowed);
(11) the The incurrence by the Company or any of its the Company’s 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 10 Business DaysDays and any Indebtedness arising from Treasury Management Arrangements incurred in the ordinary course of business or consistent with past practice;
(12) The incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount not to exceed the greater of (a) $135.0 million and (b) 2.0% of Total Assets (or the equivalent thereof, measured at the time of each incurrence, in the applicable foreign currency), at any one time outstanding;
(13) Indebtedness of (x) the Company or any Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) any Person outstanding on the date such Person was acquired by the Company or a Restricted Subsidiary of the Company or was merged with or into or consolidated with the Company or a Restricted Subsidiary of the Company; provided that, such Indebtedness is in an aggregate amount not to exceed (i) the greater of $135.0 million and 2.0% of Total Assets at the time of incurrence, at any one time outstanding, plus (ii) unlimited additional Indebtedness if after giving pro forma effect to such acquisition, merger, amalgamation or consolidation, either:
(A) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof; or
(B) the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would not be lower than it was immediately prior to such acquisition, merger or consolidation;
(14) The incurrence by the Company or its Restricted Subsidiaries of Indebtedness arising from agreements providing for guarantees, indemnification, deferred or adjusted purchase price, earn-out or similar obligations, incurred in connection with the acquisition or disposition of any business, assets or Restricted Subsidiary of the Company (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) or other Investment in a business or Person, so long as, in the case of any disposition, the principal amount of such Indebtedness does not exceed the gross proceeds (including non-cash proceeds) actually received by the Company or any Restricted Subsidiary of the Company in connection with such transactions;
(15) The incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating to net oil Indebtedness arising in connection with endorsement of instruments for collection or natural gas balancing positions arising deposit in the ordinary course of businessbusiness or consistent with past practice;
(1316) The incurrence by the Company or any obligation arising from agreements of its Restricted Subsidiaries of Indebtedness consisting of obligations to pay insurance premiums in an amount not to exceed the annual premiums in respect of such insurance premiums at any one time outstanding;
(17) Indebtedness of the Company or any of its Restricted Subsidiaries, the proceeds of which are applied to defease or discharge the Notes pursuant to Articles 8 or 11 hereof;
(18) Take-or-pay obligations contained in supply arrangements entered into by the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment in the ordinary course of purchase price, earn outs, business or similar obligations, in each case, incurred or assumed in connection consistent 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 Subsidiarypast practice;
(1419) any Permitted Acquisition Indebtedness; andIndebtedness related to unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law;
(1520) the The incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or the issuance by the Company of Disqualified Stock or the issuance by any Disqualified Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation value at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness or liquidation value incurred or Disqualified Stock issued pursuant to this clause (1520), not to exceed the greater of (ia) $75.0 200.0 million and (iib) 5.03.0% of Total Assets at the Company’s Adjusted Consolidated Net Tangible Assets determined as time of incurrence, at any one time outstanding;
(21) Indebtedness of the date Company or any of its Restricted Subsidiaries supported by a letter of credit, bankers; acceptances or other similar instruments issued pursuant to the Credit Facilities in a principal amount not in excess of the stated amount of such letter of credit;
(22) The incurrence of any Physician Support Obligations by the Company or issuanceany Restricted Subsidiary, in an amount not to exceed $16.0 million at any one time outstanding;
(23) HUD Financings incurred after the Issue Date in an aggregate principal amount not to exceed $30.0 million at any one time outstanding; and
(24) Indebtedness of the Company or any of its Restricted Subsidiaries arising pursuant to any Permitted Intercompany Activities, Permitted Tax Restructuring and related transactions. The Company will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt but excluding intercompany Indebtedness) that is contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable 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, by different collateral or because it is guaranteed by different obligors. For purposes of determining compliance with this Section 4.09, in :
(1) In the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1) through (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 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 Company will shall not, and will 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or ), and the Company may issue Disqualified Stock, and the Guarantors any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Consolidated Interest Expense Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters (the "Reference Period") 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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.5 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) . The first paragraph of this covenant 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”"):
(1i) the incurrence by the Issuers Company and any Restricted Subsidiary of any Permitted Bank Debt; provided that the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount of all Permitted Bank Debt at any one time outstanding under this clause (1) (with letters shall not exceed $100.0 million plus 85% of credit being deemed to have a principal amount equal to the maximum potential liability consolidated accounts receivable of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.050% of the consolidated inventory of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Issuers Company and the Guarantors any Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related any Note Guarantees;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries of (a) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or any of its such Restricted SubsidiariesSubsidiary and (b) Capital Lease Obligations, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease refinance or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 million and (ii) 3.010% of the Company’s Adjusted 's Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5v) 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 or replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) the first paragraph of this covenant or clauses (2ii), (3iii), (4v), (5), (14xiii) or (15xiv) of this Section 4.09(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
: (Aa) if the Company or any Guarantor is the obligor on such Indebtedness and the payee such Indebtedness is not the Company or in favor of a GuarantorRestricted Subsidiary other than a Wholly Owned Restricted Subsidiary, 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, Notes in the case of the Company, or the Note GuaranteeGuarantee and of such Guarantor, in the case of a Guarantor; and
, and (B) (ib)(I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company thereof and (iiII) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Wholly Owned Restricted Subsidiary of the Company, will thereof; shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging interest rate, commodity or currency risk in the ordinary course of business for bona fide hedging purposes; provided that the notional principal amount of any such Hedging Obligation with respect to interest rates does not exceed the amount of Indebtedness or other liability to which such Hedging Obligation relates;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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;
(10ix) the incurrence by the Company or any of its Restricted Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (ix);
(x) the incurrence of Indebtedness solely in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and or completion guarantees provided by or performance Guarantees, to the Company or a Restricted Subsidiary extent that such incurrence does not result in the ordinary course incurrence of business and any Guarantees or letters obligation for the payment of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessborrowed money to others;
(11xi) 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 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 a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price 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 IndentureSubsidiary; provided that provided, however, that: (a) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company or any Restricted SubsidiarySubsidiary of the Company, 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 its Restricted Subsidiaries in connection with such disposition;
(14xii) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Permitted Acquisition IndebtednessIndebtedness 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; provided, in each such case, that the amount thereof is included in Consolidated Interest Expense of the Company as accrued;
(xiii) the incurrence of Indebtedness by Foreign Subsidiaries in an amount not to exceed 10% of the Total Tangible Assets of the Foreign Subsidiaries, taken as a whole; and
(15xiv) 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 refinance or discharge replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xiv), not to exceed $25.0 million. Indebtedness or preferred stock of any Person which is outstanding at the greater time such Person becomes a Restricted Subsidiary of the Company (iincluding upon designation of any Subsidiary or other Person as a Restricted Subsidiary) $75.0 million and (ii) 5.0% or is merged with or into or consolidated with the Company or a Restricted Subsidiary of the Company shall be deemed to have been incurred at the time such Person becomes such a Restricted Subsidiary of the Company or is merged with or into or consolidated with the Company or a Restricted Subsidiary of the Company’s Adjusted Consolidated Net Tangible Assets determined , as applicable. The Company will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the date Company unless such Indebtedness is also contractually subordinated in right of such incurrence or issuancepayment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of any Liens, Guarantees, maturity of payments of structural seniority. 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 (1i) through (15xiv) above, or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will be permitted to divideshall, in its sole discretion, classify and or reclassify such item of Indebtedness on the date of its incurrence, (or later redivide or reclassify all or a portion of such item of Indebtedness, any part thereof) in any manner that complies with this Section 4.09 and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to the first paragraph of this Section 4.09. For purposes of determining any particular amount of Indebtedness under this covenant, Guarantees, Liens or obligations in support of letters of credit supporting Indebtedness shall not be included to the Credit Agreement outstanding on extent such letters of credit are included in the date on which Notes are first issued and authenticated under amount of such Indebtedness. Any increase in the amount of any Indebtedness solely by reason of currency fluctuations shall not be considered an incurrence of Indebtedness for purposes of 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 Debtcovenant. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, and 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 shall 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Amkor Technology Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Amkor shall not, and will 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 DebtIndebtedness), and the Company Amkor will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Amkor and any Restricted Subsidiary that is a Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or Indebtedness), and Amkor may issue Disqualified Stock, and the Guarantors any Restricted Subsidiary that is a Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Consolidated Interest Expense Coverage Ratio for the CompanyAmkor’s most recently ended four full fiscal quarters 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 preferred stock is issued, as the case may be, issued would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a10.2.4(a) preceding 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”):
(1i) the incurrence by Amkor and its Restricted Subsidiaries of any Permitted Bank Debt; provided that the aggregate principal amount of all such Indebtedness at any one time outstanding shall not exceed $100,000,000, plus 85.0% of the consolidated accounts receivable of Amkor, plus 50.0% of the consolidated inventory of Amkor; provided, further, that none of such Indebtedness (including specifically any Permitted Bank Debt other than the Obligations) may be secured by any of the Collateral;
(ii) the incurrence by Amkor and its Subsidiaries of Existing Indebtedness;
(iii) the incurrence by the Issuers and the Guarantors, of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability Obligors of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrenceObligations;
(2iv) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and 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 Company Amkor or any of its Restricted Subsidiaries of (A) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant plant, or equipment used in the business of the Company Amkor or any of its Restricted SubsidiariesSubsidiaries and (B) Capital Lease Obligations, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) $45.0 million and (ii) 3.075,000,000 or 10.0% of the CompanyAmkor’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceAssets;
(5v) the incurrence by the Company Amkor 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, or replace, defease or 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 was permitted by this Indenture Agreement to be incurred under Section 4.09(a10.2.4(a) or clauses clause (2ii), clause (3v), clause (4xiii), or clause (5), (14) or (15xiv) of this Section 4.09(b10.2.4(b);
(6vi) the incurrence by the Company Amkor or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Amkor and any of its Restricted Subsidiaries; provided, however, that:
that (A) if the Company Amkor or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee such Indebtedness is not the Company or in favor of a GuarantorRestricted Subsidiary other than a Wholly Owned Restricted Subsidiary, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all the Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
and (B) (iB)(I) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Amkor or a Wholly Owned Restricted Subsidiary of the Company thereof and (iiII) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Amkor or a Wholly Owned Restricted Subsidiary of the Companythereof, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Amkor or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6vi);
(7vii) 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 Company Amkor or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are incurred for the purpose of fixing or hedging interest rate, commodity, or currency risk in the ordinary course of business for bona fide hedging purposes; provided that the notional principal amount of any such Hedging Obligation with respect to interest rates does not exceed the amount of Indebtedness or other liability to which such Hedging Obligation relates;
(9viii) the Guarantee by the Company Amkor or any of its Restricted Subsidiaries of Indebtedness of the Company Subsidiary Guarantors or a Restricted Subsidiary of the Company to the extent Amkor 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 guaranteed10.2.4;
(10ix) the incurrence by the Company or any of its Restricted Amkor’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 Amkor that was not permitted by this clause (ix);
(x) the incurrence of Indebtedness solely in respect of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performance, surety surety, and similar bonds and or completion guarantees provided by or performance Guarantees, to the Company or a Restricted Subsidiary extent that such incurrence does not result in the ordinary course incurrence of business and any Guarantees or letters obligation for the payment of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of businessborrowed money to others;
(11xi) 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 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 Amkor or any a Restricted Subsidiary of the Company Amkor 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 assets, or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided provided, however, that (A) such obligation Indebtedness is not reflected as a liability on the face of the balance sheet of the Company Amkor or any Restricted SubsidiarySubsidiary of Amkor 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 Amkor and its Restricted Subsidiaries in connection with such disposition;
(14xii) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Permitted Acquisition IndebtednessIndebtedness 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; provided, in each such case, that the amount thereof is included in Consolidated Interest Expense of Amkor as accrued;
(xiii) the incurrence of Indebtedness by Foreign Subsidiaries in an amount not to exceed 10.0% of the Total Tangible Assets of the Foreign Subsidiaries, taken as a whole; and
(15xiv) the incurrence by the Company Amkor 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 replace any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (15xiv), not to exceed the greater $75,000,000. AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT – Page 75 Notwithstanding any other provision of (i) $75.0 million and (ii) 5.0% this Section 10.2.4(b), none of the Company’s Adjusted Consolidated Net Tangible Assets determined as Permitted Debt, other than the Obligations, may at any time be secured by a Lien on any or all of the date Collateral.
(c) Indebtedness or preferred stock of any Person which is outstanding at the time such incurrence Person becomes a Restricted Subsidiary of Amkor (including upon designation of any Subsidiary or issuance. other Person as a Restricted Subsidiary) or is merged with or into or consolidated with Amkor or a Restricted Subsidiary of Amkor shall be deemed to have been incurred at the time such Person becomes such a Restricted Subsidiary of Amkor or is merged with or into or consolidated with Amkor or a Restricted Subsidiary of Amkor, as applicable.
(d) Amkor will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of Amkor unless such Indebtedness is also contractually subordinated in right of payment to the Obligations on substantially identical terms; provided, however, that no Indebtedness of Amkor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Amkor solely by virtue of any Liens, Guarantees, maturity of payments, or structural seniority.
(e) For purposes of determining compliance with this Section 4.0910.2.4, 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 clause (1b)(i) through clause (15b)(xiv) abovepreceding, or is entitled to be incurred pursuant to Section 4.09(a10.2.4(a), the Company will be permitted to divideAmkor may, in its sole discretion, classify and or reclassify such item of Indebtedness on the date of its incurrence, (or later redivide or reclassify all or a portion of such item of Indebtedness, any part thereof) in any manner that complies with this Section 4.0910.2.4 and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to Section 10.2.4(a). For purposes of determining any particular amount of Indebtedness under this Section 10.2.4, Guarantees, Liens, or obligations in support of letters of credit supporting Indebtedness shall not be included to the Credit Agreement outstanding on extent such letters of credit are included in the date on which Notes are first issued and authenticated under amount of such Indebtedness. Any increase in the amount of any Indebtedness solely by reason of currency fluctuations shall not be considered an incurrence of Indebtedness for purposes of 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 Debtcovenant. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, and 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 shall 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person10.2.4.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and the Guarantors, any Guarantor of Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries Guarantors thereunder) not to exceed the greater of (i) $700.0 225.0 million and (ii) $175.0 million plus 35.025% of the Company’s Adjusted Consolidated Net Tangible Assets determined on as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of (i) the Existing Indebtedness and (ii) any Permitted Acquisition Indebtedness;
(3) the incurrence by the Issuers Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture hereof and the Exchange Notes and the related Note GuaranteesGuarantees to be issued pursuant to the Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (i) $45.0 25.0 million and (ii) 3.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture hereby to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (148), (13), (15) or (1516) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
(Ai) if the Company or any Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Guarantor, if such Indebtedness must be is not 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 Company, or the Note Guarantee, in the case of a GuarantorGuarantor 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 Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, will be deemed to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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:
(Aa) 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
(Bb) 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business and not for speculative purposes;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries the Guarantors 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 4.09covenant; 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 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 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;
(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 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, contribution, adjustment of purchase price, earn earn-outs, 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 a Restricted Subsidiary in a transaction permitted by this Indenture; hereby, 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) the incurrence by the Company or any Permitted Acquisition Indebtednessof its Restricted Subsidiaries of Indebtedness in respect of the financing of insurance premiums with the providers of such insurance or their Affiliates in the ordinary course of business;
(15) the incurrence by the Company or any 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); and
(1516) 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 (1516), not to exceed the greater of (i) $75.0 20.0 million and (ii) 5.02.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 considered to be contractually subordinated in right of payment to any other Indebtedness solely by virtue of being unsecured, secured with different collateral or to a greater or lesser extent or priority or by virtue of structural subordination, maturity date or being guaranteed by less than all guarantors of such other Indebtedness. 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 (1Section 4.09(b)(1) through (1516) 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. Indebtedness under the Credit Agreement Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture hereunder 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 or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion of principal, accreted value or liquidation preference, the amortization of original issue discount or debt discount, the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same termsIndebtedness, 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, 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 not be deemed not to be an incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09covenant; provided provided, that the amount thereof shall be is included in Fixed Charges of the Company as accrued to the extent required by the definition of such term. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets at the date of determination; and
(2b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Diamondback Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Neither Parent nor the Company will notwill, and neither of them will not 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), none of Parent, the Company, any of the Restricted Subsidiaries or any Other Guarantor will issue any Disqualified Stock, and the Company will not issue any Disqualified Stock not, and neither Parent nor the Company, will not permit any of its the Restricted Subsidiaries to or any Other Guarantor to, issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers that:
(1) Parent may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Consolidated Interest Coverage Ratio of Parent and its Subsidiaries on a consolidated basis, for the Guarantors 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 Preferred StockDisqualified Stock or other shares of preferred stock, if the Fixed Charge Coverage Ratio ratio of total Indebtedness to Consolidated Cash Flow for the Company’s 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 such Preferred Stock other shares of preferred stock is issued, as the case may be, would have been at least 2.25 less than 2.5 to 1.01, 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 the Preferred Stock other shares of preferred stock had been issued, as the case may be, at on the beginning first day of such four-quarter period.
(b) The provisions of Section 4.09(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 or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Issuers Company and the Guarantors, Guarantors of (A) additional Indebtedness and letters of credit under a Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Agreement (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) and (B) Additional Notes and related Note Guarantees issued under this Indenture in a maximum aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (i) $700.0 million and (ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence25.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries any Guarantor of Indebtedness represented by 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;
(3) the incurrence by the Issuers and the Guarantors Parent of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesExisting Indebtedness;
(4) the incurrence by Parent of the F3 Capital Note on the Issue Date in the principal amount not to exceed $60.0 million and the payment, or accretion, of interest on the F3 Capital Note pursuant to the terms of such F3 Capital Note;
(5) the incurrence by the Company or any of its and the Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its and the Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (45), not to exceed $5.0 million at any time outstanding; provided that the greater Company or any Restricted Subsidiary may incur an additional $5.0 million of (i) $45.0 million and (ii) 3.0% of Capital Lease Obligations at any one time outstanding to the Company’s Adjusted Consolidated Net Tangible Assets determined extent that any operating leases are redesignated as of the date of such incurrence or issuanceCapital Lease Obligations for accounting purposes;
(56) Indebtedness of (a) Parent or (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, 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, 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 or such Restricted Subsidiary, 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 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 (6); and (b) the new Subsidiary becomes a Restricted Subsidiary and a Guarantor;
(7) the incurrence by Parent, the Company or any of its Restricted Subsidiaries Subsidiary of Permitted Refinancing Indebtedness in exchange for, or the net proceeds Net Proceeds of which are used to renew, refund, refinance, replace, defease or 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 was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09(a) or clauses (2), ) (3), (4), (5), (14) or this clause (15) of this Section 4.09(b7);
(6) 8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of intercompany Indebtedness between or among the Company and any of its the Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor Restricted Subsidiary is the obligor on such Indebtedness and the payee is not the Company or a GuarantorRestricted Subsidiary, 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 Company, or Notes and the Note Guarantee, in the case of a GuarantorGuarantees; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and Subsidiary, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanySubsidiary, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6)8);
(79) 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 Company or any of its Restricted Subsidiaries Subsidiary of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries Subsidiary 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 4.094.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Note Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness in respect of workers’ compensation claims, self-insurance obligations or bidobligations, plugging bankers’ acceptances, and abandonment, appeal, reimbursement, performance, performance and 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;
(1112) the incurrence by the Company or any of its Restricted Subsidiaries 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;
(1213) the incurrence by the Company or any Restricted Subsidiary 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 Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Note Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, or similar obligationspursuant to such agreements, in each case, any case incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock Guarantor (other than Note Guarantees of a Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary in a transaction permitted for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received 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;Subsidiary in connection with such disposition; and
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by Parent, the Company or any of its Restricted Subsidiaries Subsidiary 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 (1514), not to exceed the greater $10.0 million. None of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance. 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 (15) above, or is entitled to be incurred pursuant to Section 4.09(a)Parent, 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 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 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 Restricted Subsidiaries or any Other Guarantor will incur any Indebtedness (including Permitted Debt. The accrual ) that is contractually subordinated in right of interest or Preferred Stock or Disqualified Stock dividends or distributionspayment to any other Indebtedness of Parent, the accretion Company or amortization such Restricted Subsidiary or Other Guarantor unless such Indebtedness is also contractually subordinated in right of original issue discount, payment to 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, Notes and the payment of dividends or distributions applicable Note Guarantee on Preferred Stock or Disqualified Stock in the form of additional securities of the same class of Preferred Stock or Disqualified Stock substantially identical terms; provided, however, that no Indebtedness will not be deemed to be an incurrence contractually subordinated in right of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued payment to 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 Indebtedness solely by virtue of Indebtedness being unsecured or by virtue of another Person being secured by on a junior 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 Personbasis.
Appears in 1 contract
Sources: Indenture (Vantage Drilling CO)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Suburban Propane will not, and 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 Company Suburban Propane 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 Issuers Suburban Propane and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Consolidated Fixed Charge Coverage Ratio for the CompanySuburban 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 such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 2.00 to 1.01.00, 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, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a10.10(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 Issuers Suburban Propane and the Guarantors, any of its Restricted Subsidiaries of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Suburban Propane and its Restricted Subsidiaries thereunder) not to exceed the greater of (ix) $700.0 800.0 million and (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company Suburban Propane and any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note GuaranteesInitial Notes;
(4) the incurrence by the Company 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 repair, to the extent the improvements or repairs may be capitalized in accordance with GAAP, or additions, including by way of acquisitions of businesses and related assets, to the purchase price or cost property and assets of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of Suburban Propane and its Restricted Subsidiaries, including, without limitation, the acquisition of assets subject to operating leases or incurred by assumption in an connection with additions, including additions by way of acquisitions or capital contributions of businesses and related assets, to the property and assets of Suburban Propane and its Restricted Subsidiaries; provided, that the aggregate principal amount outstanding, including all Permitted Refinancing of Indebtedness incurred to renew, refund, refinance, replace, defease or discharge outstanding at any Indebtedness incurred time pursuant to this clause (4), may not to exceed the greater of (ix) $45.0 100.0 million and (iiy) 3.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any one time outstanding;
(5) the incurrence by the Company 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 renew, refund, refinance, replace, defease or discharge any discharge, 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 was permitted by this Supplemental Indenture to be incurred under Section 4.09(a10.10(a) or clauses (2), (3), (4), (5), (14) or (1513) of this Section 4.09(b10.10(b);
(6) the incurrence by the Company or Suburban Propane and any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Suburban Propane and any of its Restricted Subsidiaries; provided, however, that:
(Aa) to the extent the aggregate amount of Indebtedness incurred in reliance on this clause (6) following the date hereof exceeds $25.0 million, if the Company or any Guarantor an Issuer is the an obligor on such Indebtedness and the payee is not the Company an 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 Company, 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 Company Suburban Propane or a Restricted Subsidiary of the Company Suburban Propane and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Suburban Propane or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanySuburban Propane’s Restricted Subsidiaries to the Company Suburban Propane or to any of its Restricted Subsidiaries of any units or shares of Preferred Stock; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock being held by a Person other than the Company Suburban Propane or a Restricted Subsidiary of the CompanySuburban Propane; and
(Bb) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Suburban Propane or a Restricted Subsidiary of the Company, 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 the Company or Suburban Propane and any of its Restricted Subsidiaries of non-speculative Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company Issuers or any of its their Restricted Subsidiaries of Indebtedness of the Company Issuers or a Restricted Subsidiary of the Company to the extent Issuers that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.0910.10; provided provided, that if the Indebtedness being guaranteed is incurred by one or both of the Issuers and is subordinated to or pari passu with the Notes, then the Guarantee must guarantee of such Indebtedness by any Restricted Subsidiary of the Issuers 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 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;
(11) the incurrence by the Company 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 inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(1211) the incurrence by the Company Suburban Propane or any of its Restricted Subsidiaries of inIndebtedness 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-kind insurance or similar obligations relating to net oil or natural gas balancing positions arising and bank overdrafts (and letters of credit in respect thereof) incurred in the ordinary course of business;
(1312) the incurrence by Suburban Propane or any obligation of its Restricted Subsidiaries of Indebtedness arising from agreements indemnities, earn-outs or other similar obligations in respect of purchase price adjustments in connection with the Company disposition of property or assets or in connection with acquisitions permitted by this Supplemental Indenture;
(a) Indebtedness of Suburban Propane or any of its Restricted Subsidiary Subsidiaries acquired after the date hereof from any Person merged or consolidated with or into Suburban Propane or any of its Restricted Subsidiaries after the Company providing for indemnificationdate hereof, adjustment of purchase price, earn outs, or similar obligationswhich Indebtedness, in each case, incurred exists at the time of such acquisition, merger, consolidation or assumed conversion and is not created in connection with the disposition contemplation of such event and where such acquisition, merger or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction consolidation is otherwise permitted by this Supplemental Indenture; provided and (b) Indebtedness of Suburban Propane to finance all or a portion of any such acquisition, merger or consolidation; provided, however, that on a pro forma basis, either (x) Suburban Propane would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in Section 10.10(a) hereof or (y) the Consolidated Fixed Charge Coverage Ratio would not be less than immediately prior to such obligation is not reflected as a liability on the face of the balance sheet of the Company or any Restricted Subsidiary;transactions; and
(14) any Permitted Acquisition Indebtedness; and
(15) the incurrence by the Company Suburban Propane 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 (1514), not to exceed the greater of (ix) $75.0 million and (iiy) 5.07.5% of the Company’s Adjusted Consolidated Net Tangible Assets determined as Assets. The Issuers will not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the date Issuers unless such Indebtedness is also contractually subordinated in right of such incurrence 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 issuanceby virtue of being secured on a first or junior Lien basis. For purposes of determining compliance with this Section 4.0910.10, 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 (1514) aboveof this Section 10.10(b), or is entitled to be incurred pursuant to Section 4.09(a10.10(a), the Company Issuers 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 10.10; provided, that Indebtedness under the Credit Agreement Facilities outstanding on the date on which the Initial Notes are first were originally issued and authenticated under this Supplemental Indenture will initially be was deemed to have been incurred on such date in reliance on the exception provided by clause (1Section 10.10(b)(1) of the definition of Permitted Debthereof and cannot be so reclassified. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided 10.10. Notwithstanding any other provision of this Section 10.10, the maximum amount of Indebtedness that the amount thereof Suburban Propane or any Restricted Subsidiary may incur pursuant to this covenant shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such termexchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1a) the Fair Market Value of such assets asset at the date of determination; , and
(2b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Second Supplemental Indenture (Suburban Propane Partners Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will Issuer shall not, and will 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, Stock and the Guarantors its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Issuer’s 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 1.1 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a4.3(a) will hereof shall 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 Issuers Issuer and the GuarantorsGuarantor of the Notes and the Note Guarantee in the aggregate principal amount to be issued on the Closing Date 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);
(2) the incurrence by the Issuer or any of 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;
(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 (13) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) $700.0 million 5.0 billion and (iiB) $175.0 million plus 35.0% 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 Company’s Adjusted Consolidated Net Tangible Assets determined on collateral securing Indebtedness under Credit Facilities contemplated by clause (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 date maximum potential liability of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3thereunder) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes not to be issued on the date of this Indenture and the related Note Guaranteesexceed $3.0 billion;
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness represented by Capital by, or incurred in connection with, Finance 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 or cost of design, construction, installation or improvement of property, plant or equipment (including, without limitation, airport, maintenance, training and office facilities, ground support equipment and tooling) used in the business of the Company Issuer or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, extend, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a4.3(a) hereof or clauses clause (2), (3), (4), (5), (146), (13), (20), (21), (24) or (1525) of this Section 4.09(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 Company 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 Company and Issuer and/or any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) 8) the issuance by any Restricted Subsidiaries of the Company’s Restricted Subsidiaries Issuer to the Company Issuer or to any of its Restricted Subsidiaries of any Preferred Stock; provided, however, that:
(A) any subsequent issuance or transfer shares 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)preferred stock;
(8) 9) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(910) the Guarantee by the Company Issuer or any Restricted Subsidiary of its Restricted Subsidiaries the Issuer of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.094.3; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the such Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness or reimbursement obligations in respect of workers’ compensation claims, self-insurance obligations, 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 obligations to airport and governmental authorities);
(12) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness in respect of selfany 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-insurance 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 bid, plugging and abandonment, appeal, reimbursement, performance, documentary letters of credit or banker’s acceptances;
(16) surety and similar appeal bonds and completion guarantees provided by that do not secure judgments that constitute an Event of Default;
(17) Indebtedness of the Company Issuer or a any of its Restricted Subsidiary 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 Guarantees other Restricted Subsidiary of the Issuer or letters their assets (other than such Receivables Subsidiary and its assets and, as to the Issuer or any other Restricted Subsidiary of credit functioning as the Issuer, other than Standard Securitization Undertakings) and is not guaranteed by any such Person;
(19) the incurrence of Indebtedness of the Issuer or supporting any of its Restricted Subsidiaries owed to one or more Persons in connection with the foregoing bonds or obligations and workers’ compensation claims financing of insurance premiums in the ordinary course of business;
(1120) 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 Company 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 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 Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition or acquisition of any business, assets or Capital Stock of a Restricted Subsidiary in a transaction permitted by this IndentureSubsidiary; provided that the maximum assumable liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the balance sheet of time received and without giving effect to any subsequent changes in value) actually received by the Company Issuer or any of its Restricted SubsidiarySubsidiaries in connection with such disposition;
(1423) Indebtedness of the Issuer or any Permitted Acquisition Indebtedness; andof 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 the applicable Restricted Subsidiary of the Issuer;
(1524) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness that is either (A) unsecured and expressly contractually subordinated to the prior payment in full in cash of all Notes and 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 Guarantor Obligations and convertible into common stock of the issuance by Issuer; provided that the Company of any Disqualified Stock in an aggregate principal amount of Indebtedness incurred pursuant to clauses (or accreted value, as applicableA) at any time outstandingand (B) together, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1524), does not exceed $1.5 billion at any time outstanding; and
(25) the incurrence by the Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, extend, defease or discharge any Indebtedness incurred pursuant to this clause (25), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance3.0 billion, at any time outstanding. For purposes of determining compliance with this Section 4.094.3, in the event that 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 (1525) above, of Section 4.3(b) hereof or is entitled to be incurred pursuant to Section 4.09(a)4.3(a) hereof, the Company Issuer 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under 4.3; provided that (A) all “Junior Secured Debt” (as defined in the Credit Agreement outstanding as in effect on the date on which Notes are first issued and authenticated under this Indenture Closing Date) will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.3(b)(21) hereof and (B) the term “Existing Indebtedness” will not include any Indebtedness that is permitted to be incurred under clauses (1), (3) or (21) of Section 4.3(b) hereof. None of the following will constitute an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.3:
(1) of the definition of Permitted Debt. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, preferred stock dividends;
(2) the accretion or amortization of original issue discount, discount (“OID”);
(3) the payment of interest on any Indebtedness not secured by a Lien in the form of additional Indebtedness with the same terms, ;
(4) the reclassification of Preferred Stock or Disqualified Stock preferred stock as Indebtedness due to a change in accounting principles, and ; and
(5) the payment of dividends or distributions on Preferred Stock preferred stock or Disqualified Stock in the form of additional securities shares of the same class of Preferred Stock preferred stock or Disqualified Stock will 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 incurred. Notwithstanding any other provision of this Section 4.3, the maximum amount of Indebtedness that the Issuer or any of its Restricted Subsidiaries may incur pursuant to this Section 4.3 shall not be deemed to be an incurrence exceeded solely as a result of Indebtedness fluctuations in exchange rates or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to the extent required by the definition of such termcurrency values. The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the IndebtednessIndebtedness as of such date, in the case of any Indebtedness issued with original issue discountOID;
(b2) the principal amount of the IndebtednessIndebtedness as of such date, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date as of determinationsuch date; and
(2B) the amount of the Indebtedness of the other PersonPerson as of such date.
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Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer will not, and 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 Company Issuer will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Preferred Stock; provided, however, that the Issuers Issuer may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyIssuer’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, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period; provided that the aggregate amount of Indebtedness (including Acquired Debt) that may be incurred and Preferred Stock that may be issued by Restricted Subsidiaries that are not Guarantors, in each case, in reliance on the Fixed Charge Coverage Ratio test set forth in this Section 4.09(a) shall not exceed the greater of (i) $300.0 million and (ii) 5% of Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence or issuance.
(b) Section 4.09(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 Issuers and the Guarantors, Issuer or any Restricted Subsidiary (whether as borrower or guarantor) of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Issuer and its Restricted Subsidiaries thereunder) not to exceed the greater greatest of (i) $700.0 million and 1.1 billion, (ii) $175.0 million plus 35.0the Borrowing Base and (iii) 30.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence by the Company Issuer and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Issuer and the Guarantors of Indebtedness represented by (a) the Initial Notes to be issued on the date Issue Date and (b) any Guarantees of this Indenture and the related Note Guarantees;Initial Notes issued on the Issue Date.
(4) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Indebtedness (x) in connection with Sale and Leaseback Transactions, or (y) represented by Capital Finance Lease Obligations, mortgage financings or purchase money obligations, obligations or other Indebtedness that in each case, the case of this clause (y) are incurred for the purpose of financing all or any part of the purchase price or other acquisition cost or cost of design, construction, installation installation, development, repair or improvement of property, plant or equipment used in the business of the Company Issuer or any of its Restricted SubsidiariesSubsidiaries (together with improvements, in an aggregate principal amount outstandingadditions, including all accessions and contractual rights relating primarily thereto), and any Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), in an aggregate principal amount, when taken together with the outstanding amount of all other Indebtedness or Permitted Refinancing Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) $45.0 300.0 million and (iib) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of at the date of such incurrence or issuanceincurrence;
(5) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case or Preferred Stock that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses clause (2), (3), (4), (5), (14) or (15) of this Section 4.09(b);
(6) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Issuer and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company Issuer or any Guarantor is the obligor on such Indebtedness and the payee is not the Company 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 CompanyIssuer, 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 Company Issuer or a Restricted Subsidiary of the Company Issuer and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Issuer or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the CompanyIssuer’s Restricted Subsidiaries to the Company 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 Company Issuer or a Restricted Subsidiary of the CompanyIssuer; and
(B) any sale or other transfer of any such Preferred Stock to a Person that is not either the Company Issuer or a Restricted Subsidiary of the CompanyIssuer, 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 Company Issuer or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee guarantee by the Company Issuer or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company Issuer or a Restricted Subsidiary of the Company Issuer 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 guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed, and if the guarantee is by a Restricted Subsidiary that is not a Guarantor, the Indebtedness guaranteed could have otherwise been incurred by such Restricted Subsidiary under this Section 4.09;
(10) the incurrence by the Company Issuer 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 issued or provided by by, or for the Company account of, the Issuer or a Restricted Subsidiary in the ordinary course of business and any Guarantees guarantees or obligations with respect to letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business;
(11) the incurrence by the Company Issuer 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 Issuer or any of its Restricted Subsidiaries of in-kind obligations relating to net oil oil, natural gas liquid or natural gas balancing positions arising in the ordinary course of business;
(13) the incurrence of any obligation arising from agreements of the Company Issuer or any Restricted Subsidiary of the Company Issuer providing for indemnification, guarantees (other than guarantees of Indebtedness), adjustment of purchase price, holdbacks, earn outs, 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 Issuer or any Restricted Subsidiary;
(14) any Permitted Acquisition Indebtedness; andthe pledge of (or a guarantee limited in recourse solely to) Equity Interests in an Unrestricted Subsidiary or Joint Venture held by the Issuer or a Restricted Subsidiary to secure Indebtedness of such Unrestricted Subsidiary or Joint Venture and solely to the extent such Indebtedness constitutes Non-Recourse Debt;
(15) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;
(16) the incurrence by the 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 and the Restricted Subsidiaries; and
(17) the incurrence by the Issuer or any Restricted Subsidiary of additional Indebtedness or the issuance by the Company Issuer of any Disqualified Stock or by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount, when taken together with the outstanding amount (or accreted value, as applicable) at any time outstanding, including of all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any other Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (1517), not to exceed the greater of (i) $75.0 300.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of on the date of such 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 4.09. For purposes of determining compliance with this Section 4.09, in the event that 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 (1517) aboveof Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company 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, or later redivide or reclassify all or a portion of such item of IndebtednessIndebtedness 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 4.09. ; provided that Indebtedness outstanding under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated Issue Date shall be considered incurred under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of 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 definition 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 DebtRefinancing Indebtedness is denominated that is in effect on the date of such refinancing. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsdividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness not secured by a Lien or on the Notes 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, term 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 Section 4.09; provided that the amount thereof shall be is included in Fixed Charges of the Company 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 clause (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 “amount” or “principal amount” of any Indebtedness or Preferred Stock or Disqualified Stock outstanding at any time of determination as of any date will beused herein shall be as set forth below or, if not set forth below, determined in accordance with GAAP:
(aA) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(bB) the principal amount of the Indebtedness, in the case of any other Indebtedness; and;
(cC) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1i) the Fair Market Value of such assets at the date of determination; and
(2ii) 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 a Credit Facility and are being treated as incurred pursuant to clause (1) of Section 4.09(b) and the letters of credit relate to other Indebtedness, then the amount of such other Indebt
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will shall not, and will 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”) Incur any Indebtedness (including Acquired Debt), ) and the Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; providedPROVIDED, howeverHOWEVER, that the Issuers Company and its Restricted Subsidiaries may incur Incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, Stock and the Guarantors Company's Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the Company’s '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 Incurred or such Disqualified Stock or such Preferred Stock is issued, as the case may be, issued would have been at least 2.25 1.75 to 1.01, if such Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued on or prior to November 30, 1999, and 2.00 to 1, if such Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued thereafter, 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 the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding Section 4.09(a) will not prohibit the incurrence of any of 4.03(a), the following items Incurrences of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable are permitted (collectively, “"Permitted Debt”Indebtedness"):
(1i) the incurrence Incurrence by the Issuers Company or any of its Restricted Subsidiaries of term and the Guarantors, of revolving Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability undrawn face amount thereof) under Credit Facilities; PROVIDED that the aggregate principal amount of the Company and its Restricted Subsidiaries thereunderall Indebtedness outstanding pursuant to this Section 4.03(b)(i) after giving effect to such Incurrence does not exceed an amount equal to exceed the greater of (i) $700.0 million and 250.0 million;
(ii) $175.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on the date of such incurrence;
(2) the incurrence Incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence Incurrence by the Issuers Company of Indebtedness represented by the Securities (other than any Additional Securities) and by the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Note Security Guarantees;
(4iv) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of (A) Acquired Debt or (B) Indebtedness represented by (including Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred ) for the purpose of financing or refinancing all or any part of the lease, purchase price or cost of design, construction, installation construction or improvement of property, plant any property (real or equipment personal) or other assets that are used or useful in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or the Capital Stock of any of its Restricted SubsidiariesPerson owning such assets and whether such Indebtedness is owed to the seller or Person carrying out such construction or improvement or to any third party), in an aggregate principal amount outstandingfor all Indebtedness Incurred pursuant to this Section 4.03(b)(iv), at the date of such Incurrence (including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance, replace, defease refinance or discharge replace any other Indebtedness incurred Incurred pursuant to this clause (4Section 4.03(b)(iv), ) not to exceed the greater of (i) $45.0 million and (ii) 3.0an amount equal to 10.0% of Total Assets; PROVIDED that, in the Company’s Adjusted Consolidated Net Tangible Assets determined as case of Indebtedness exceeding $2.0 million Incurred pursuant to this Section 4.03(b)(iv), such Indebtedness exists at the date of such incurrence purchase or issuancetransaction or is created within 180 days thereafter;
(5v) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease refinance or discharge any replace 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 was permitted to be Incurred by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b4.03(b);
(6vi) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries, including any Indebtedness arising in connection with a Receivables Facility; providedPROVIDED, howeverHOWEVER, that:
that (A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.03(b)(vi);
(7vii) 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 Incurrence by the Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations that are Incurred (A) for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by this Section 4.03 to be outstanding or (B) for the purpose of fixing or hedging currency exchange rate risk or commodity price risk Incurred in the ordinary course of business;
(9viii) the Guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent that the guaranteed Indebtedness was permitted to be incurred 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 guaranteed4.03;
(10ix) the incurrence Incurrence of Indebtedness secured by or financing Receivables (including any such Indebtedness under the Credit Facilities), PROVIDED that the aggregate principal amount of such Indebtedness Incurred pursuant to this Section 4.03(b)(ix) does not, at any time, exceed an amount equal to $75.0 million less the aggregate Receivable Financing Amount of all Receivables Facilities of the Company and its Restricted Subsidiaries;
(x) the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in under (or constituting reimbursement obligations with respect to) letters of self-insurance obligations or bid, plugging and abandonment, appeal, reimbursement, performancecredit, surety and bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary instruments issued in connection with the ordinary course of business and any Guarantees or a Permitted Business, including letters of credit functioning as in respect of workers' compensation claims, self-insurance, and insurance written by MIICA in connection with a Permitted Business; PROVIDED, HOWEVER, that upon the drawing of such letters of credit or supporting any of the foregoing bonds or other instrument, such obligations and workers’ compensation claims in the ordinary course of businessare reimbursed within 30 days following such drawing;
(11xi) the incurrence Incurrence by Foreign Subsidiaries of Indebtedness for working capital purposes, and by the Company or any of its Restricted Subsidiaries of Guarantees of Indebtedness arising from of Foreign Subsidiaries or foreign joint ventures, PROVIDED that the honoring by a bank or other financial institution aggregate principal amount 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 and of the Company or Indebtedness so Guaranteed at any Restricted Subsidiary time outstanding does not exceed 5% 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 IndebtednessTotal Assets; and
(15xii) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or (which may comprise Indebtedness under the issuance by the Company of any Disqualified Stock New Credit Facility) 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 outstanding pursuant to this clause (15), Section 4.03(b)(xii) not to exceed the greater of (i) an amount equal to $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance35.0 million. For purposes of determining compliance with this Section 4.094.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1i) through (15) 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 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 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. 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 Section 4.09; provided that the amount thereof shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Person.through
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will and Holdings shall not, and will shall not permit any of its Restricted their respective 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 Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted their respective Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that (i) the Issuers Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, Stock if the Fixed Charge Coverage Ratio of the Company for the Company’s '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, as the case may be, issued would have been at least 2.25 1.75 to 1.01, if such incurrence or issuance is on or prior to December 15, 1999 or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period and (ii) Holdings may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio of Holdings for 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 is issued would have been at least 1.75 to 1, if such incurrence or issuance is on or prior to December 15, 1999, or 2.0 to 1, if such incurrence or issuance is after December 15, 1999, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Preferred Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The provisions for the first paragraph of this Section 4.09(a) 4.09 will not prohibit apply to the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “"Permitted Debt”):"), each of which shall be given independent effect:
(1i) the incurrence by the Issuers Company, Holdings and their respective Subsidiaries of Indebtedness (including letters of credit), or guarantees of such Indebtedness, pursuant to the term loan portion of the New Credit Facility; provided that, after giving pro forma effect to any such incurrence and the Guarantorsapplication of the proceeds therefrom, of Indebtedness and letters of credit under Credit Facilities in an the aggregate principal amount at any one time of all Indebtedness of the Company, Holdings and their Subsidiaries outstanding under this clause the term loan portion of the New Credit Facility does not exceed $100.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay any such Indebtedness pursuant to Section 4.10 hereof;
(1ii) the incurrence by the Company, Holdings and their respective Subsidiaries of Indebtedness (including letters of credit), or guarantees of such Indebtedness, pursuant to the revolving loan portion of the New Credit Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Company, Holdings and its Restricted their Subsidiaries thereunder); provided that, after giving pro forma effect to any such incurrence and the application of the proceeds therefrom, the aggregate principal amount of all Indebtedness (including letters of credit) of the Company, Holdings and their Subsidiaries outstanding under the revolving loan portion of the New Credit Facility does not to exceed the greater of (ix) $700.0 75.0 million and less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay any such Indebtedness pursuant to Section 4.10 hereof; or (iiy) $175.0 million plus 35.0% the amount of the Company’s Adjusted Consolidated Net Tangible Assets determined on the Borrowing Base as of any date of such incurrence;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes to be issued on (other than any Additional Notes), the date incurrence by Holdings of this Indenture and the related Note Holdings Guarantee or the incurrence by any Restricted Subsidiary of Subsidiary Guarantees;
(4iv) the incurrence by the Company Company, Holdings or any of its Restricted their 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 or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Company, Holdings or any of its Restricted Subsidiariessuch Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding;
(v) the incurrence by any corporation that becomes a Subsidiary of the Company after the Issue Date of Acquired Debt, including all Permitted Refinancing which Indebtedness incurred to renewis existing at the time such corporation becomes a Subsidiary; provided, refundhowever, refinancethat (A) either (x) the principal amount (or accreted value, replaceas applicable) of such Acquired Debt, defease or discharge together with any other outstanding Indebtedness incurred pursuant to this clause (4iv), does not exceed $5.0 million since the Issue Date or (y) immediately after giving effect to exceed such corporation becoming a Subsidiary, Holdings could incur at least $1.00 of additional Indebtedness (other than Permitted Debt) in accordance with this Indenture (B) such Indebtedness is without recourse to the greater Company, Holdings or to any of (i) $45.0 million their respective Subsidiaries or to any of their respective properties or assets other than Person becoming a Subsidiary or its properties and assets and (iiC) 3.0% such Indebtedness was not incurred as a result of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date or in connection with or in contemplation of such incurrence or issuanceentity becoming a Subsidiary;
(5vi) the incurrence by the Company Company, Holdings or any of its Restricted their Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge any refund, 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 was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (14) or (15) of this Section 4.09(b)incurred;
(6vii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Company, Holdings and any of its their respective Wholly Owned Restricted Subsidiaries; provided, however, that:
that (Ai) if the Company or any Guarantor Holdings is the obligor on such Indebtedness and the payee is not the Company or a GuarantorIndebtedness, such Indebtedness must be unsecured and is expressly subordinated subordinate to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; and
Notes 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 Company Company, Holdings or a Wholly Owned Restricted Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company Company, Holdings or a Wholly Owned Restricted Subsidiary of the Company, will shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Company, Holdings or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7viii) the issuance Indebtedness of an Unrestricted Subsidiary owed to and held 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 Holdings or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such Preferred Stock to a Person Subsidiary, provided 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 Holdings or such Restricted Subsidiary that was not is permitted by to make an investment in such Unrestricted Subsidiary under this clause (7)Indenture at the time such Indebtedness is incurred in an amount equal to the principal amount of such Indebtedness;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company 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;
(10ix) the incurrence by the Company or Holdings of Hedging Obligations that are incurred for the purpose of fixing or hedging currency risk or interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of its Restricted this Indenture to be outstanding;
(x) the incurrence by 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;
(xi) Indebtedness incurred 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 Company, Holdings and the Restricted Subsidiary Subsidiaries in the ordinary course of business business, and any Guarantees or refinancings thereof;
(xii) Indebtedness for letters of credit functioning as or supporting any of the foregoing bonds or obligations and relating to workers’ ' compensation claims and self-insurance or similar requirements in the ordinary course of business;
(11xiii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from guarantees of Indebtedness of the honoring by a bank Company, Holdings or any Subsidiary 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 Company Company, Holdings or any Restricted a Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or Capital Stock Subsidiary, other than guarantees of a Restricted Indebtedness incurred by any person acquiring all or any portion of such business, assets or Subsidiary in a transaction permitted by this Indenture; for the purpose of financing such acquisition, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on Indebtedness shall at no time exceed the face of gross proceeds actually received by the balance sheet of the Company or any Restricted SubsidiaryCompany, Holdings and their Subsidiaries in connection with such disposition;
(14xiv) the issuance by Holdings, on the Issue Date, of shares of Holdings Preferred Stock, with an aggregate liquidation value of up to $17.6 million and the issuance of additional shares of Holdings Preferred Stock as dividends on outstanding shares of Holdings Preferred Stock subsequent to the Issue Date in accordance with the terms of the Holdings Preferred Stock;
(xv) the incurrence of Exchange Notes issued (a) in exchange for all, but not less than all, of the outstanding Holdings Preferred Stock in accordance with the terms of the Holdings Preferred Stock as in effect on the Issue Date, if immediately prior to giving effect to the incurrence of such Exchange Notes, the Fixed Charge Coverage Ratio of Holdings would have been at lease 2.0 to 1 pursuant to the Fixed Charge Ratio test set forth in clause (ii) of the proviso of the first paragraph of this Section; provided that, in calculating such Fixed Charge Coverage Ratio of Holdings, no effect shall be given to clause (ii) of the definition of "Consolidated Net Income" and (b) as interest on Exchange Notes originally issued in compliance with this Indenture;
(xvi) the incurrence by Holdings of Qualified Subordinated Indebtedness in an aggregate principal amount not to exceed $5.0 million at any Permitted Acquisition Indebtednesstime outstanding; and
(15xvii) the incurrence by the Company Company, Holdings or any of its Restricted their Subsidiaries of additional Indebtedness or the issuance (in addition to Indebtedness permitted by the Company any other clause of any Disqualified Stock this paragraph) 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), outstanding not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance20.0 million. For purposes of determining compliance with this Section 4.09covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1i) through (15xvii) above, above or is entitled to be incurred pursuant to Section 4.09(a)the first paragraph of this covenant, the Company will be permitted to divideshall, in its sole discretion, classify and reclassify such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. covenant and such item of Indebtedness under the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on clauses or pursuant to the exception provided by clause (1) of the definition of Permitted Debtfirst paragraph hereof. The accrual Accrual of interest or Preferred Stock or Disqualified Stock dividends or distributions, and 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 accreted value 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 shall be included in Fixed Charges of the Company as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Personcovenant.
Appears in 1 contract
Sources: Indenture (Desa Holdings Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company will not, and 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 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 Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Debt to Cash Flow 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 or such Preferred Stock is issued, as the case may be, would have been at least 2.25 no greater than 6.0 to 1.01, 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.
(b) The provisions of Section 4.09(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”):), nor will it prohibit the Company’s Restricted Subsidiaries from issuing the following types of Preferred Stock:
(1) the incurrence by the Issuers Company and the Guarantors, any Subsidiary Guarantor of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its 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 (ix) $700.0 million 3.0 billion less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Supplemental Indenture to repay any term Indebtedness or debt securities under Credit Facilities or to repay any revolving credit Indebtedness under Credit Facilities and effect a corresponding commitment reduction thereunder, in each case pursuant to Section 4.10 hereof and (iiy) $175.0 million plus 35.0300% of the Company’s Adjusted Consolidated Net Tangible Assets determined on Cash Flow of the date Company and its Subsidiaries for the most recently ended four full fiscal quarters for which financial statements are available; 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 that the incurrence of such incurrenceadditional Indebtedness is permitted pursuant to any of the other provisions of this Section 4.10;
(2) the incurrence by the Company and its Restricted Subsidiaries of the any Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 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 or cost of design, construction, installation or improvement of property, plant or equipment or the Capital Stock of any Person owning such assets used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.05.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as Total Assets, at any time outstanding; provided, however, that the maximum amount permitted to be outstanding under this clause (4) shall not be deemed to limit additional Indebtedness of the date type described in this clause (4) to the extent that the incurrence of such incurrence or issuanceadditional 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 Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (13), (14), (15), (19) or (1524) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Parent, HoldCo, the Company and any of its Restricted SubsidiariesSubsidiaries and any Guarantors; provided, however, that:
(A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and 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 Company, or the Note Guarantee, in the case of a Subsidiary 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 Parent, HoldCo, the Company or a Restricted Subsidiary of the Company 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 Company or a Restricted Subsidiary of the Company, or a Guarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any 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 CompanyCompany 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 Company or any of its Restricted Subsidiaries of Hedging ObligationsObligations in the ordinary course of business;
(9) the Guarantee guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors 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 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 obligations, bankers’ acceptances, deposits, performance bonds, completion bonds, bid bonds, appeal bonds and surety bonds, indemnity bonds, specific performance or bid, plugging and abandonment, appeal, reimbursement, performance, surety and injunctive relief bonds or similar bonds and completion guarantees provided by the Company or a Restricted Subsidiary obligations in the ordinary course of business 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 businessforegoing;
(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 DaysDays of notice to the Company or any of its Restricted Subsidiaries;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of in-kind obligations relating Indebtedness in respect of letters of credit required to net oil be issued on behalf of Royal Street in accordance with the Royal Street Agreements or natural gas balancing positions arising in the ordinary course of businessconnection with any Permitted Joint Venture Investment;
(13) any obligation arising from agreements of the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of Indebtedness for relocation or clearing obligations relating to 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 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 Permitted Acquisition of its Restricted Subsidiaries of Contribution Indebtedness; and;
(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 issuance 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 Disqualified Stock 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, upon the drawing of 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 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, replace, defease or discharge any Indebtedness incurred or Disqualified Stock issued pursuant to this clause (1520), not to exceed $100.0 million.
(21) the greater 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;
(i22) $75.0 million 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 (iior their respective spouses or estates) 5.0% 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’s Adjusted Consolidated Net Tangible Assets determined as 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 date Company solely by virtue of such incurrence Indebtedness being unsecured or issuanceby 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 (1524) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, the Company will be permitted to divide, classify and reclassify all or a portion of such item of Indebtedness on the date of its incurrence, or later redivide or 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 or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges Consolidated Interest Expense of the Company as accrued to accrued. Notwithstanding any other provision of this Section 4.09, the extent required by the definition of such term. The maximum amount of Indebtedness that the Company or any Indebtedness outstanding Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of any date will be:
(a) the accreted value of the Indebtedness, fluctuations 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 of determination; and
(2) the amount of the Indebtedness of the other Person.exchange rates or currency valu
Appears in 1 contract
Sources: First Supplemental Indenture (Metropcs Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Parent will not, and 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 Parent, the Company nor any Subsidiary Guarantor will not issue any Disqualified Stock Stock, and the Parent will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Parent, the Company and any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stock, if the Fixed Charge Coverage Ratio for the CompanyParent’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, as the case may be, would have been at least 2.25 2.0 to 1.0, determined on a pro pro-forma basis (including a pro 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.
(b) The provisions of Section 4.09(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 Issuers and the Guarantors, Parent or any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed not to have a principal exceed an amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (ia) $700.0 25.0 million and (iib) $175.0 million plus 35.015.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined on ACNTA as of the date of such incurrence;
(2) the incurrence by the Company and Parent or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Issuers Parent, the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued on the date of this Indenture Issue Date and the any Exchange Notes and related Note GuaranteesGuarantees issued pursuant to any Registration Rights Agreement;
(4) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Attributable Debt, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company Parent or any of its such Restricted SubsidiariesSubsidiary, in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease or discharge any refund Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 5.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuanceat any time outstanding;
(5) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refundextend, refinance, renew, replace, defease or discharge refund 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), (14) or (1511) of this Section 4.09(b) or this clause (5);
(6) the incurrence by the Company Parent or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company Parent and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and the payee Parent or a Subsidiary Guarantor is not the Company or a Guarantorobligee, 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, or if the Parent or a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Parent, the Company nor another Subsidiary 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 Guarantee of the Parent or such Subsidiary Guarantor, as the case of the Company, or the Note Guarantee, in the case of a Guarantormay be; and
(B) any (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Parent or a Restricted Subsidiary of the Company Parent, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either neither the Company or Parent nor a Restricted Subsidiary of the CompanyParent, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (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 Company Parent or any of its Restricted Subsidiaries of Hedging Obligations;
(9) 8) the Guarantee guarantee by the Parent, the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Parent, the Company or a Restricted any Subsidiary of the Company to the extent Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided that if ;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Parent or any of its Restricted Subsidiaries of obligations relating to or pari passu net gas balancing positions arising in the ordinary course of business and consistent with the Notes, then the Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedpast practice;
(10) the incurrence by the Company Parent 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 issued for the Company or a Restricted Subsidiary in account of the ordinary course of business Parent and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Parent and any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each instance other than an obligation for money borrowed);
(11) Indebtedness of a Restricted Subsidiary (other than the Company) incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, the Parent 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 Parent 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 Parent, the Parent 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 (11);
(12) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness arising from agreements of 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 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 Company or any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn outs, price 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; Subsidiary, provided that the maximum aggregate liability in respect of all such obligation is not reflected as a liability on indebtedness shall at no time exceed the face of gross proceeds actually received by the balance sheet of the Company or any Parent and its Restricted Subsidiary;
(14) any Permitted Acquisition IndebtednessSubsidiaries in connection with such disposition; and
(1513) the incurrence by the Company Parent 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 (15), not to exceed the greater of (i) $75.0 million and (ii) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance5.0 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 (1513) aboveof this Section 4.09, or is entitled to be incurred pursuant to Section 4.09(a), the Company Parent will be permitted to divide, classify and (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09covenant. 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 under of any Person existing at the Credit Agreement outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred on by the Parent and the Restricted Subsidiary at the time such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtPerson becomes a Restricted Subsidiary. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 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 Section 4.09covenant; provided provided, in each such case, that the amount thereof shall be is included in Fixed Charges of the Company Parent as accrued to 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 of determination; and
(2) the amount of the Indebtedness of the other Personaccrued.
Appears in 1 contract
Sources: Indenture (Gastar Exploration LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Neither the Company will not, and will not permit 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 Company will not issue any Disqualified Stock and none of the Guarantors will not permit any of its Restricted Subsidiaries to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if 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 or such Preferred Stock preferred stock is issued, as the case may be, would have been at least 2.25 no less than 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the Preferred Stock preferred stock had been issued, as the case may be, at the beginning of such four-four quarter period.
(b) The provisions of Section 4.09(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 Issuers Company and any of the Guarantors, Guarantors of additional Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries the Guarantors thereunder) not to exceed $100.0 million less the greater aggregate amount of (i) $700.0 million and (ii) $175.0 million plus 35.0% all Net Proceeds of Asset Sales applied by the Company or any of the Company’s Adjusted Consolidated Net Tangible Assets determined on Guarantors since the date of such incurrencethis Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries the Guarantors of the Existing Indebtedness;
(3) the incurrence by the Issuers Company and 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 GuaranteesIndenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) $45.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuance;
(5) the incurrence by the Company 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, replace, defease or 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 was permitted by this Indenture to be incurred under Section 4.09(a) hereof or clauses (2), (3), (4), (5), 10) and (14) or (1516) of this Section 4.09(b);
(65) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiariesthe Guarantors; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such Indebtedness and 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 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 Company or a Restricted Subsidiary of the Company and Guarantor and
(iiB) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the CompanyGuarantor, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted SubsidiaryGuarantor, as the case may be, that was not permitted by this clause (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries Guarantors to the Company or to any of its Restricted Subsidiaries the Guarantors of any Preferred Stockshares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanyGuarantor; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the CompanyGuarantor, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary Guarantor that was not permitted by this clause (76);
(8) 7) the incurrence guarantee by the Company or any of its Restricted Subsidiaries of Hedging Obligations;
(9) the Guarantee by the Company or any of its Restricted Subsidiaries Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company to the extent Guarantor that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.09; provided provided, however, that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the Guarantee must shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(108) 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 any reimbursement obligations in connection therewith;
(9) 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 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;
(11) the incurrence by the Company or any of its Restricted Subsidiaries 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;
(1210) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of in-kind Indebtedness represented by Capital Lease Obligations, purchase money obligations relating to net oil or natural gas balancing positions arising 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 ordinary course of business;
(13) any obligation arising from agreements business of the Company or any Restricted Subsidiary of the Company providing for indemnificationGuarantors, 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; and
(15) 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 outstandingamount, 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 (1510), not to exceed $25.0 million at any time outstanding;
(11) the greater incurrence by the Company or any of the Guarantors of Hedging Obligations;
(i12) 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;
(14) obligations consisting of deferred payment, capital contribution or similar obligations of DER Holdings arising from its ownership of membership interests in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Realty, to the extent constituting Indebtedness;
(15) obligations of the Company and any of the 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 such Core Investments;
(16) the incurrence by the Company and any of the Guarantors of Indebtedness in an aggregate amount, 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 $75.0 million and million; or
(ii17) 5.0% deferred obligations to pay the purchase price for purchases of the Company’s Adjusted Consolidated Net Tangible Assets determined as non-controlling interest in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Realty by the Company or a Guarantor. 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 date Company or such Guarantor unless such Indebtedness is also contractually subordinated in right of such incurrence 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 issuanceby 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 (1517) above, or is entitled to be incurred pursuant to Section 4.09(a)) hereof, 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 portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under the Credit Agreement 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 or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred 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 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 Section 4.09; provided . Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the amount thereof Company or any Guarantor may incur pursuant to this Section 4.09 shall not be included deemed to be exceeded solely as a result of fluctuations in Fixed Charges of the Company as accrued to the extent required by the definition of such term. exchange rates or currency values.
(c) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Vector Group LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company MagnaChip will not, and 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 Company MagnaChip and US LLC will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries (other than US LLC) to issue any Preferred Stockshares of preferred stock; provided, however, that the Issuers MagnaChip and US LLC may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Guarantors Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Preferred Stockpreferred stock, if the Fixed Charge Coverage Ratio for the CompanyUS LLC’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 preferred stock is issued, as the case may be, would have been at least 2.25 2.0 to 1.01, 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 preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.09(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 Issuers MagnaChip and the Guarantors, any Restricted Subsidiary of additional revolving credit Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company MagnaChip and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $100.0 million or (y) as of the date of the incurrence, the aggregate of (i) $700.0 million 85% of the book value, net of reserves, of all accounts receivable owned by MagnaChip and its Restricted Subsidiaries, as shown on US LLC’s most recent consolidated balance sheet prepared in accordance with GAAP, as of the end of the most recent fiscal quarter preceding such date, plus (ii) $175.0 million plus 35.050% of the Companybook value of all inventory, net of reserves, owned by MagnaChip and its Restricted Subsidiaries, as shown on US LLC’s Adjusted Consolidated most recent consolidated balance sheet prepared in accordance with GAAP, as of the end of the most recent fiscal quarter preceding such date, plus (iii) $20.0 million; less the aggregate amount of all Net Tangible Assets determined on Proceeds of Asset Sales or Casualty Events applied by MagnaChip or any of the date Restricted Subsidiaries after the Issue Date to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case as to Indebtedness incurred under this clause (1) of such incurrencethe definition of Permitted Debt and as to Net Proceeds applied pursuant to Section 4.10(b)(1) hereof;
(2) the incurrence by MagnaChip and any Restricted Subsidiary of up to $100.0 million under one or more debt facilities or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the Company sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (but not including by means of sales of debt securities to institutional investors) in whole or in part from time to time; less the aggregate amount of all Net Proceeds of Asset Sales or Casualty Events applied by MagnaChip or any of the Restricted Subsidiaries after the Issue Date to repay any term Indebtedness under debt facilities or commercial paper facilities or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case as to Indebtedness incurred under this clause (2) of the definition of Permitted Debt and as to Net Proceeds applied pursuant to Section 4.10(b)(1) hereof;
(3) the incurrence by MagnaChip and its Restricted Subsidiaries of the Existing Indebtedness;
(34) the incurrence on the Issue Date by the Issuers MagnaChip and the Guarantors of Indebtedness represented by the Notes and the Senior Subordinated Notes and this Indenture and guarantees thereof by the Guarantors and the related Exchange Notes to be issued on pursuant to the date of this Indenture and the related Note Guaranteesregistration rights agreements;
(45) the incurrence by the Company MagnaChip or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation or improvement of propertyproperty (real or personal), plant or equipment used in the business of the Company MagnaChip or any of its Restricted SubsidiariesSubsidiaries (whether through the direct purchase of assets or the Equity interests of any Person owning such assets), in an aggregate principal amount outstandingamount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (ia) $45.0 25.0 million at any time outstanding and (iib) 3.05% of the CompanyTotal Assets as shown on US LLC’s Adjusted Consolidated Net Tangible Assets determined as of the date of such incurrence or issuancemost recent consolidated balance sheet prepared in accordance with GAAP;
(56) the incurrence by the Company MagnaChip or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company, in each case that was permitted by this Indenture to be incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (146) or (1514) of this Section 4.09(b);
(67) the incurrence by the Company MagnaChip or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company MagnaChip and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company MagnaChip or any Guarantor is the obligor on such Indebtedness and the payee is not the Company MagnaChip 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 Notesnotes, in the case of the CompanyMagnaChip, or the Note 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 Company MagnaChip or a Restricted Subsidiary of the Company MagnaChip and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company MagnaChip or a Restricted Subsidiary of the CompanyMagnaChip, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company MagnaChip or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries Guarantor to the Company MagnaChip or to any other Guarantor of its Restricted Subsidiaries shares of any Preferred Stockpreferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Preferred Stock preferred stock being held by a Person other than the Company MagnaChip or a Restricted Subsidiary of the CompanyGuarantor; and
(B) any sale or other transfer of any such Preferred Stock preferred stock to a Person that is not either the Company MagnaChip or a Restricted Subsidiary of the CompanyGuarantor, will be deemed, in each case, to constitute an issuance of such Preferred Stock preferred stock by such Restricted Subsidiary Guarantor that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations8);
(9) the Guarantee incurrence by MagnaChip or any Restricted Subsidiaries of Hedging Obligations in the Company ordinary course of business;
(10) the guarantee by MagnaChip or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Company MagnaChip or a Restricted Subsidiary of the Company to the extent MagnaChip 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 shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence of Indebtedness by the Company MagnaChip or any of its Restricted Subsidiaries in the form of Indebtedness in respect of self-insurance obligations or bidperformance bonds, plugging and abandonment, appeal, reimbursement, performance, surety and similar bonds and completion guarantees provided and surety or appeal bonds entered into by the Company MagnaChip or a any of its Restricted Subsidiary Subsidiaries in the ordinary course of business and any Guarantees their business;
(12) the incurrence of Indebtedness by MagnaChip or letters of credit functioning as or supporting any of the foregoing bonds its Restricted Subsidiaries 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 MagnaChip or such Restricted Subsidiary, pursuant to reimbursement or indemnification obligations and workers’ compensation claims to such person, in each case incurred in the ordinary course of business;
(1113) the incurrence by the Company MagnaChip or any of its the Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five 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 Subsidiarybusiness days;
(14) Indebtedness of MagnaChip or any Permitted Acquisition Restricted Subsidiary issued to any of its directors, employees, officers or consultants or a Restricted Subsidiary in connection with the redemption or purchase of Capital Stock that, by its terms, is subordinated to the Notes, is not secured by any of the assets of MagnaChip or the Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of the Notes and Refinancing Indebtedness of the Indebtedness; and, in an aggregate principal amount which, when added with the amount of Indebtedness Incurred under this clause (14) and then outstanding, does not exceed $5.0 million;
(15) the incurrence by the Company MagnaChip or any of its the 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 (15), not to exceed $25.0 million;
(16) the greater incurrence of (i) $75.0 million and (ii) 5.0% Indebtedness by MagnaChip or any of the Company’s Adjusted Consolidated Net Tangible Assets determined as Restricted Subsidiaries arising from agreements of MagnaChip or any of the date Restricted Subsidiaries providing for adjustment of purchase price 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 of MagnaChip LLC;
(17) Indebtedness of a Restricted Subsidiary organized outside the United States or Korea incurred to finance the working capital of such incurrence Restricted Subsidiary, in an aggregate principal amount at any time outstanding not to exceed $30.0 million; and
(18) Indebtedness incurred by MagnaChip or issuanceany of the Restricted Subsidiaries constituting reimbursement obligations under letters of credit issued in the ordinary course of business, including, without limitation, letters of credit to procure raw materials or relating to workers’ compensation claims or self-insurance, or other Indebtedness relating to reimbursement-type obligations regarding workers’ compensation claims. MagnaChip 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 MagnaChip 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 MagnaChip solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (or any portion thereof) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1518) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company MagnaChip, in its sole discretion, will be permitted to divide, classify and reclassify such item of Indebtedness (or any portion thereof) on the date of its incurrence, or later redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. 4.09 and will only be required to include the amount and type of such Indebtedness under the Credit Agreement 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) one of the definition of Permitted Debtabove clauses. The accrual of interest or Preferred Stock or Disqualified Stock dividends or distributionsinterest, 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 preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Disqualified Stock or Disqualified Stock preferred stock in the form of additional securities shares of the same class of Preferred Disqualified Stock or preferred stock, and the accrual of dividends on Disqualified Stock or preferred stock, will not be deemed to be an incurrence of Indebtedness or an issuance of Preferred Disqualified Stock or Disqualified Stock preferred stock for purposes of this Section 4.09; provided provided, in each such case, that the amount thereof shall be of any such accrual, accretion or payment is included in Fixed Charges of US LLC as accrued. Notwithstanding any other provision of this Section 4.09, the Company maximum amount of Indebtedness that MagnaChip or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as accrued to the extent required by the definition a result of such term. fluctuations in exchange rates or currency values.
(d) The amount of any Indebtedness outstanding as of any date will be:
(a1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(b2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(c3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(1A) the Fair Market Value of such assets at the date of determination; and
(2B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (MagnaChip Semiconductor LTD (United Kingdom))