Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), 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 Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period. (b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”): (1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million; (2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture; (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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that: (A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and (B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7); (8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed; (10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business; (11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days; (12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; (13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition; (14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business; (15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and (16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and (17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction. (c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis. (d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 4 contracts
Sources: Fifth Supplemental Indenture (Westlake Chemical Corp), Fourth Supplemental Indenture (Westlake Chemical Corp), Third Supplemental Indenture (Westlake Chemical Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Any New Parent will not, the Company will not and shall not neither of them will permit any of its their 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 any such New Parent or the Company will not issue any Disqualified Stock and neither of them will not permit any of its their Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that such New Parent or the Company Company, whichever entity is then the ultimate parent company, may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for such New Parent’s or the Company’s ’s, as the case may be, most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 2.5 to 11 until December 31, 2009 and 3.0 to 1 thereafter, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.14(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by such New Parent, the Company or and any Restricted Subsidiary Guarantor of additional Indebtedness and letters of credit under one or more any Credit Facilities Facility (A) 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 stated amount thereof of the Company and its Restricted Subsidiaries thereunder) not to exceed $20.0 million, less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets Asset Sales applied by any such New Parent, the Company or (ii) $600.0 millionany of their 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 in each case, effect a corresponding commitment reduction thereunder pursuant to Section 4.11 hereof;
(2) (A) the incurrence by any such New Parent, the Company and its their Restricted Subsidiaries of Existing Indebtedness and (B) encumbrances or restrictions existing under agreements existing on the Existing IndebtednessIssue Date as in effect on that date;
(3) the incurrence by any such New Parent, the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the Issue Date and the Exchange Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by any such New Parent, the Company 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 any such New Parent, the Company or usable in a Permitted Businessany of their Restricted Subsidiaries, as the case may be, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at any time outstanding;
(5) the incurrence by any such New Parent, the Company or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.14(a) hereof or clause clauses (2), (3), (4), (5), (16) or (1712) of this Section 4.11(b4.14(b);
(6) the incurrence by any such New Parent, the Company or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among such New Parent, the Company and any of its their Restricted Subsidiaries; provided, however, that:
(A) if such New Parent, the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not such New Parent, the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in Notes and the case of the Company, or the Guarantee, in the case of a Subsidiary GuarantorNote Guarantees; 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 such New Parent, the Company or a any of their Restricted Subsidiary of the Company and Subsidiaries, or (ii) any sale or other transfer of any such Indebtedness to a Person that is not either any of such New Parent, the Company or a any of their Restricted Subsidiary of the Company Subsidiaries, will be deemed, in each case, to constitute an incurrence of such Indebtedness by such New Parent, 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 such New Parent’s or the Company’s Restricted Subsidiaries to such New Parent, the Company or to any of its their Restricted Subsidiaries of shares of preferred stock; provided, however, that:
that any (A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than such New Parent, the Company or a such Restricted Subsidiary of the Company; and
Subsidiary, or (B) any sale or other transfer of any such preferred stock to a Person that is not either any of such New Parent, the Company or a such Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by any such New Parent, the Company or any of its their Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(9) the guarantee by any such New Parent, the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of such New Parent, the Company or a any of their Restricted Subsidiary of Subsidiaries, as the Company case may be, that was permitted to be incurred by another provision of this Section 4.114.14; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by any such New Parent, the Company or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appealbids, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business, including Note Guarantees or obligations of such New Parent, the Company or such Restricted Subsidiary, as the case may be, with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(11) the incurrence by any such New Parent, the Company or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;; and
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by New Parent, the Company or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1612), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or 5.0 million at any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately one time outstanding after giving pro forma effect to such incurrence or issuance, as and the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at . Any New Parent and the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall Issuers will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of such New Parent, the Company Issuers 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company Issuers solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.14, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described set forth in clauses (1) through (1712) of Section 4.11(b4.14(b), or is entitled to be incurred pursuant to Section 4.11(a4.14(a), any such New Parent or the Company Company, as the case may be, will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.14, and such item of Indebtedness will be treated as having been incurred pursuant to such category. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued Issue Date 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, the accretion or amortization of original issue discount, if applicable, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.114.14; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of such New Parent or the Company Company, as the case may be, as accrued. Notwithstanding any other provision of this Section 4.114.14, the maximum amount of Indebtedness that any such New Parent, the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 3 contracts
Sources: Indenture (Forbes Energy Services Ltd.), Indenture (Forbes Energy Services Ltd.), Indenture (Forbes Energy Services LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness or Restricted Subsidiaries that are not Guarantors may issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) (a) the incurrence by the Company or and any Restricted Subsidiary of Indebtedness and letters of credit under one or more the revolving facility component of the Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (11)(a) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 250.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 3 contracts
Sources: Indenture (Er Acquisition Corp), Indenture (Metaldyne Corp), Indenture (Metaldyne Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 3 contracts
Sources: Term Loan Agreement (Carnival PLC), Term Loan Agreement (Carnival PLC), Term Loan Agreement (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall ION will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company ION will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company ION may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the CompanyION’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 3 contracts
Sources: Restructuring Support Agreement (Ion Geophysical Corp), Restructuring Support Agreement (Ion Geophysical Corp), Restructuring Support Agreement (Ion Geophysical Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”; 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 shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock Stock, and the its Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt) and 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or preferred stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (ia) 30.0$2.45 billion and (b) $700.0 million plus 35.0% of Consolidated Net Tangible the Total Assets or (ii) $600.0 millionof the Company determined on the date of such incurrence;
(2) the incurrence by the Company and or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company Issuers and the Subsidiary Guarantors of Indebtedness represented by (a) the Notes and the related Note Guarantees to be issued on the Issue Date and (b) the Exchange Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenturethe 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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4)) at any time; provided that, immediately 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) 1.0$75.0 million and (b) 3.25% of Consolidated Net Tangible the Total Assets and (ii) $20.0 million at any time outstandingof the Company;
(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 extend, renew, refund, refinance, renewreplace, defease defease, discharge or replace otherwise retire for value, any Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of any Restricted Subsidiary, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause (2), (3), (4), (513), (1614) or (1715) of this Section 4.11(b4.09(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 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 neither the Company or nor a Restricted Subsidiary of the Company Subsidiary, 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 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 CompanySubsidiary; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not 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 to the Company extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedGuaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness in respect consisting of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee premiums in customary amounts consistent with the operations and surety bonds; or similar requirements (and, in all cases, letters business of credit in respect thereof) in the ordinary course of businessCompany and its Restricted Subsidiaries;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from constituting reimbursement obligations with respect to letters of credit; provided that, upon the honoring by a bank or other financial institution drawing of a checksuch letters of credit, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered obligations are reimbursed within five Business Days30 days following such drawing;
(12) the incurrence by Foreign the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness in of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an aggregate Equity Interest in, such Unrestricted Subsidiary or Joint Venture and not as guarantor of such Indebtedness; provided that, immediately after giving effect to any such incurrence, the principal amount at any time outstanding pursuant to this clause (12), including of all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), ) and then outstanding does not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 25.0 million;
(13) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionPermitted Acquisition Indebtedness;
(14) the incurrence by the Company or a Restricted any Foreign Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into that, in the ordinary course aggregate together with all other Indebtedness of business;
all Foreign Subsidiaries (15) the incurrence by the Company of including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, replace, defease, discharge or otherwise retire for value any of its Subsidiaries Indebtedness incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilitypursuant to this clause (14)), does not exceed $50.0 million; and
(1615) 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 extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), 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 incurred or issued pursuant to this clause (15) and by then outstanding (including all Indebtedness and Disqualified Stock incurred or issued to Refinance any Restricted Subsidiary of any additional preferred stock, Indebtedness or Disqualified Stock incurred or issued pursuant to this clause (15)) does not to exceed the greater of (ia) 5.0$75.0 million and (b) 3.25% of Consolidated Net Tangible the Total Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by of the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding determined on the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionincurrence.
(c) The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and 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 Company or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1715) of Section 4.11(b)4.09(b) hereof, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted in its sole discretion to divide, redivide, classify or reclassify such item of Indebtedness on the date of its incurrence, and later divide, redivide, classify or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of any obligation of the Company or any Restricted Subsidiary as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.09; providedprovided that, in each such case, that the amount thereof is included in Fixed Charges of the Company as accruedaccrued to the extent required by the definition of such term.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The principal amount of any Permitted Refinancing Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 3 contracts
Sources: Indenture (NGL Energy Partners LP), Indenture (NGL Energy Partners LP), Indenture (NGL Energy Partners LP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt)) or issue Disqualified Stock, and that the Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock except for preferred stock issued to and held by the Company or any Wholly-Owned Restricted Subsidiary of the Company, PROVIDED that any subsequent issuance or transfer of Capital Stock that results in such Wholly-Owned Restricted Subsidiary ceasing to be a Wholly-Owned Restricted Subsidiary of the Company or any subsequent transfer of such preferred stock (other than to the Company or any of its Wholly-Owned Restricted Subsidiaries) shall be deemed, in each case, to constitute the issuance of such preferred stock by the issuer thereof; providedPROVIDED, howeverHOWEVER, that the Company or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such issue 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 deemedif, 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 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding on the date of such incurrence or issuanceissuance and after giving effect thereto, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least Consolidated Leverage Ratio does not exceed 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction1.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: First Supplemental Indenture (Olympic Financial LTD), Second Supplemental Indenture (Arcadia Financial LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly 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 Borrower shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedStock, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.except:
(bi) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company Borrower and its Restricted Subsidiaries thereunder), together with Indebtedness of its Restricted Subsidiaries under any Credit Facilities permitted by Section 4.09 of the Existing Indebtedness;
Indenture, at any one time outstanding not to exceed an amount equal to $517,000,000, less the amount of all Net Proceeds (3as defined in the Indenture) of all Asset Sales (as defined in the incurrence by the Company and the Subsidiary Guarantors of Indenture) applied to repay Indebtedness represented by the Notes and the related Guarantees to be issued under Credit Facilities pursuant to this Supplemental Section 4.10 of the Indenture subsequent to the date of the Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingSurviving Debt;
(5iii) the incurrence intercompany Indebtedness incurred by the Company Borrower as a result of loans or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and advances from any of its Restricted Subsidiaries; provided, however, that:
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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in Advances on terms approved by the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; and
Administrative Agent and (B) (ix) any subsequent issuance or transfer of Equity Interests Interests, other than directors qualifying shares, 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 Borrower or a Restricted Subsidiary of the Company will Subsidiary, 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, Borrower that was not permitted by this clause (6iii);
(7iv) Hedging Obligations that are incurred for the issuance by any purpose of the Company’s Restricted Subsidiaries to the Company fixing or hedging interest rate risk with respect to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person floating rate Indebtedness 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)Agreement to be outstanding;
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(9v) the guarantee by the Company or any of its Restricted Subsidiaries Borrower of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision under the Indenture;
(vi) loans and advances to the Borrower from members of this Section 4.11the Board of Directors, officers or shareholders of the Borrower; provided provided, however, that if the such Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall must be expressly subordinated to the same extent as prior payment in full in cash of all Obligations with respect to the Advances and all terms of such Indebtedness guaranteedshall have been approved by the Administrative Agent;
(10vii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness obligations in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, bid, appeal, bid completion, guarantee surety and surety bonds; or similar requirements (and, in all cases, letters bonds and completion of credit in respect thereof) performance guarantees provided by the Borrower in the ordinary course of business;
(11viii) Indebtedness of the incurrence by Borrower owed to, including obligations in respect of letters of credit for the Company or benefit of, any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank Person in connection with workers’ compensation, health, disability or other financial institution of a checkemployee benefits or property, draft casualty or similar instrument inadvertently drawn against insufficient fundsliability insurance provided by such Person to the Borrower, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred reimbursement or indemnification obligations to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationsPerson, in each case, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) ; provided, however, that upon the request of such Person for reimbursement or indemnification, such obligations are reimbursed within 30 days following such incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityor drawing; and
(16ix) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Disqualified Stock of the Borrower (in addition to any Indebtedness or Disqualified Stock permitted by clauses (i) through (ix))above in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock1,000,000; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company Borrower shall not incur, and shall not permit any Subsidiary Guarantor to incur, incur any Indebtedness (including Permitted Debtany Indebtedness permitted under clauses (i) through (ix) above) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor Borrower unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee Advances on substantially identical terms; provided, however, that no Indebtedness will of the Borrower shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company Borrower solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basisunsecured.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Credit Agreement (Madison River Communications Corp.), Credit Agreement (Madison River Communications Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise in any manner become directly or indirectly liableliable for the payment of, contingently or otherwise, with respect to otherwise incur (collectively, “"incur”) "), any Indebtedness (including Acquired DebtIndebtedness and the issuance of Disqualified Stock), 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, except that the Company and any Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and if, at the Restricted Subsidiaries may incur Indebtedness or issue preferred stocktime of such event, if the Fixed Charge Coverage Ratio for the Company’s most recently ended immediately preceding four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 available, taken as one accounting period, would have been equal to at least 2.0 to 11.0.
(ii) In making the foregoing calculation for any four-quarter period that includes the Closing Date, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect will be given to the applicable transaction related thereto)Transaction, as if the additional Indebtedness such transactions had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, occurred at the beginning of such four-quarter period.
. In addition (b) Section 4.11(a) but without duplication), in making the foregoing calculation, pro forma effect will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):be given to:
(1) the incurrence of such Indebtedness and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if such Indebtedness was incurred and the application of such proceeds occurred at the beginning of such four-quarter period;
(2) the incurrence, repayment or retirement of any other Indebtedness by the Company or its Restricted Subsidiaries since the first day of such four-quarter period as if such Indebtedness was incurred, repaid or retired at the beginning of such four-quarter period; and
(3) the acquisition (whether by purchase, merger or otherwise) or disposition (whether by sale, merger or otherwise) of any company, entity or business acquired or disposed of by the Company or its Restricted Subsidiary Subsidiaries, as the case may be, since the first day of such four-quarter period, as if such acquisition or disposition occurred at the beginning of such four-quarter period. In making a computation under the foregoing clause (1) or (2), (A) the amount of Indebtedness under a revolving credit facility will be computed based on the average daily balance of such Indebtedness during such four-quarter period, (B) if such Indebtedness bears, at the option of the Company, a fixed or floating rate of interest, interest thereon will be computed by applying, at the option of the Company, either the fixed or floating rate, and letters (C) the amount of credit any Indebtedness that bears interest at a floating rate will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligations have a remaining term at the date of determination in excess of 12 months).
(iii) Notwithstanding the foregoing, the Company may, and may permit its Restricted Subsidiaries to, incur the following Indebtedness ("Permitted Indebtedness"):
(1) Indebtedness of the Company or any Subsidiary Guarantor under one or more the Credit Facilities Agreement (and the incurrence by any Guarantor 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 and its Subsidiaries thereunder) not to exceed $375,000,000, less any amounts applied to the greater permanent reduction of (i) 30.0% such credit facilities pursuant to the provisions of Consolidated Net Tangible Assets or (ii) $600.0 millionSection 5(j);
(2) the incurrence Indebtedness represented by the Company Notes (other than the Additional Notes) and its Restricted Subsidiaries of the Existing IndebtednessGuarantees;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureExisting 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 cash proceeds of which are used to extend, refund, refinancerefinance or replace, renew, defease or replace any Indebtedness (other than intercompany Indebtedness) that was is permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (173) of this Section 4.11(b)above;
(65) Indebtedness owed by the incurrence Company to any Restricted Subsidiary or owed by any Restricted Subsidiary to the Company or a Restricted Subsidiary (provided that such Indebtedness is held by the Company or any of its such Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary); provided, however, provided that:
(A) if any Indebtedness of the Company or any Subsidiary Guarantor owing to any such Restricted Subsidiary is unsecured and subordinated in right of payment from and after such time as the obligor on such Indebtedness Notes shall become due and the payee is not the Company payable (whether at Stated Maturity, acceleration, or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated otherwise) to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case and performance of the Company, 's obligations under the Notes or the Subsidiary Guarantor's obligations under its Guarantee, in as the case of a Subsidiary Guarantormay be; and
(B) (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 thereof and (iiy) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary 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 (65);
(76) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 any Restricted Subsidiary of the Company that was permitted to be under Hedging Obligations incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(117) the incurrence by Indebtedness of the Company or any Restricted Subsidiary consisting of its guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(8) either (A) Capitalized Lease Obligations of the Company or any Restricted Subsidiaries Subsidiary or (B) Indebtedness under purchase money mortgages or secured by purchase money security interests so long as (x) such Indebtedness is not secured by any property or assets of the Company or any Restricted Subsidiary other than the property and assets so acquired and (y) such Indebtedness is created within 90 days of the acquisition of the related property; provided that the aggregate amount of Indebtedness under clauses (A) and (B) does not exceed 15% of Consolidated Tangible Assets at any one time outstanding;
(9) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Section 5(s);
(10) 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 funds in the ordinary course of business; provided that such Indebtedness is covered extinguished within five Business Daystwo business days of incurrence;
(1211) the incurrence by Foreign Subsidiaries Indebtedness of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries represented by letters of Indebtedness arising from agreements credit for the account of the Company or such Restricted Subsidiary providing for indemnificationSubsidiary, adjustment of purchase price or similar obligationsas the case may be, in each caseorder to provide security for workers' compensation claims, incurred payment obligations in connection with the disposition of any business, assets self-insurance 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into similar requirements in the ordinary course of business;
(1512) the incurrence of Non-Recourse Indebtedness by the Company of Permitted Joint Ventures that are Restricted Subsidiaries;
(13) Indebtedness incurred by a Receivables Subsidiary pursuant to a Receivables Program; provided that, after giving effect to any such incurrence of its Subsidiaries Indebtedness, the aggregate principal amount of all Indebtedness incurred in connection with the purchase of accounts receivable under this clause (13) and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilitythen outstanding does not exceed $30,000,000; and
(1614) Indebtedness of the incurrence by the Company Company, any Restricted Subsidiary or any Permitted Joint Venture not permitted by any other clause of its Restricted Subsidiaries of additional Indebtedness this definition, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or 30,000,000 at any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionone time outstanding.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(div) For purposes of determining compliance with this Section 4.115(i), in the event that an item of any proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1) through (1714) of Section 4.11(b5(i)(iii), or is entitled to be incurred pursuant to Section 4.11(a5(i)(i), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11covenant. Indebtedness under the Credit Facilities outstanding on Agreement immediately following the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially Acquisition shall be deemed to have been incurred on such the date of the Acquisition in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values5(i)(iii).
Appears in 2 contracts
Sources: Note Purchase Agreement (Signal Medical Services), Note Purchase Agreement (Jw Childs Equity Partners Ii Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will shall, and shall not permit any of the Guarantors to, issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries that do not guarantee the Notes to issue any shares of preferred stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 (a) 2.25 to 1.0, if such incurrence or issuance is on or prior to April 1, 2004 or (b) 2.50 to 1.0, if such incurrence or issuance is after April 1, 2004, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.;
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor 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 1)(with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (ix) 30.0% $235.0 million (provided that such amount shall be reduced to the extent of Consolidated Net Tangible Assets any reduction or elimination of any commitment under any Credit Facility resulting from or relating to the formation of any Receivables Subsidiary or the consummation of any Qualified Receivables Transaction and shall thereafter be increased to an amount not greater than $235.0 million to the extent of any increase in the commitment under any Credit Facility resulting from or relating to the termination of any Qualified Receivables Transaction or the elimination of any Receivables Subsidiary) or (iiy) $600.0 millionthe amount of the Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by (including, without limitation, 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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under this Section 4.11(a4.09(a) or clause clauses (2), (3), (4), (5), (1610) or (1713) of this Section 4.11(b4.09(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the GuaranteeSubsidiary Guarantee (other than in the case of intercompany Indebtedness of a Guarantor to the Company), in the case of a Subsidiary GuarantorGuarantor except to the extent such Notes are pledged as collateral for Senior Debt; 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesor to the extent required under the Credit Facilities;
(9) 8) 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 that was permitted to be incurred by another provision of this Section 4.11; provided 4.09;
(9) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedCompany that was not permitted by this clause (9);
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such any 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 subsidiarya Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary Subsidiary for the purpose of financing such acquisition; provided provided, however, that (i) such Indebtedness is not reflected on the balance sheet of the Company or any Restricted Subsidiary (contingent obligations referred to in a footnote or footnotes to financial statements and not otherwise reflected on the balance sheet shall not be deemed to be reflected on such balance sheet for purposes of this clause (i)) and (ii) the maximum aggregate 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 Company or such and/or the Restricted Subsidiary in connection with such disposition;
(1411) the incurrence by any Foreign Subsidiaries of the Company in an aggregate principal amount (or a Restricted Subsidiary of accreted value, as applicable) at any time outstanding including all Permitted Refinancing Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of businessincurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (11), not to exceed $10.0 million;
(1512) the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified Receivables Transaction that is without recourse to the Company or to any other Restricted Subsidiary of Indebtedness the Company or their assets (other than such Receivables Subsidiary and its assets and, as to the Company or any of its Subsidiaries incurred in connection with the purchase of accounts receivable Restricted Subsidiaries, other than pursuant to representations, warranties, covenants and related assets indemnities customary for such transactions) and is not guaranteed by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPerson; and
(1613) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (1613), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 7.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision For purposes of determining compliance with this Section 4.114.09, in the maximum amount event that an item of proposed Indebtedness that meets the Company criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or any Restricted Subsidiary may incur is entitled to be incurred pursuant to this Section 4.11 shall not 4.09(a), the Company will, in its sole discretion, be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will be deemed to be exceeded solely as a result have been incurred on such date in reliance on the exception provided by clause (1) of fluctuations in exchange rates or currency valuesthe definition of Permitted Debt.
Appears in 2 contracts
Sources: Indenture (Icon Health & Fitness Inc), Indenture (Icon Health & Fitness Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Parent and the Company shall will not, and shall will not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Parent nor the Company will not issue any Disqualified Stock and will not Stock, nor permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor of Indebtedness and letters of credit under one or more Credit Facilities Facilities, which may be senior in right of payment to the Notes, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Parent, the Company and its their Restricted Subsidiaries thereunder) not to exceed the greater $50.0 million, provided, that, not more than $25.0 million of such Indebtedness at any one time outstanding under this clause (i1) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionshall be term indebtedness;
(2) the incurrence by the Parent, the Company and its their Restricted Subsidiaries of Existing Indebtedness (including Indebtedness arising under the Existing IndebtednessFloating Rate Notes, the Unsecured Floating Rate Notes, and the related agreements and instruments);
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to on the date of this Supplemental Indenture;
(4) the incurrence by the Parent, the Company 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 Parent, the Company or usable in a Permitted Businessany of their Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at any time outstanding;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Parent, the Company or a 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 the Parent, the Company or a Restricted Subsidiary); provided, however, that for any such Indebtedness outstanding at any time under this clause (5), on the date that such Subsidiary is acquired by the Parent, the Company or a Restricted Subsidiary, the Parent or the Company would have been able to incur $1.00 of additional Indebtedness pursuant to clause (a) above after giving effect to the incurrence of such Indebtedness pursuant to this clause (5).
(6) the incurrence by the Parent, the Company or any of its their Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(aclause (a) above or clause clauses (2), (3), (4), (5), (166) or (1713) of this Section 4.11(b4.09(b);
(67) the incurrence by the Parent, the Company or any of its their Restricted Subsidiaries of intercompany Indebtedness between or among the Parent, the Company and any of its the Parent’s Wholly-Owned 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 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 Parent, the Company or a Wholly-Owned 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 Parent, the Company or a Wholly-Owned Restricted Subsidiary of the Company Parent, will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Parent, 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 Company, the Parent or to any of its Wholly-Owned Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Parent, the Company or a Wholly-Owned Restricted Subsidiary of the CompanyParent; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Parent, the Company or a Wholly-Owned Restricted Subsidiary of the Company; Parent, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Parent, the Company or any of its their Restricted Subsidiaries of Hedging Obligations and cash management obligations in the ordinary course of business and not for speculative purposesbusiness;
(910) the guarantee by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness of the Parent, the Company or a Restricted Subsidiary of the Company Parent that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(1011) the incurrence by the Parent, the Company or any of its their Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business;
(1112) the incurrence by the Parent, the Company or any of its their Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;; and
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries 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 extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets $35.0 million. The Parent and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall will not incur, and shall will not permit any Subsidiary other Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Parent, the Company or such Subsidiary other 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 Parent, the Company or any other Guarantor solely by virtue of being unsecured or by virtue of holders of secured Indebtedness having entered into inter-creditor agreements giving one or more of such holders priority over the other holders in the Collateral held by them or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1Sections 4.09(b)(1) through (1713) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Parent, the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with the original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (Angiotech America, Inc.), Indenture (Angiotech Pharmaceuticals Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), Indebtedness) and that the Company will shall not issue any Disqualified Stock Stock, and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (x) the Company and the Guarantors may incur Indebtedness (including Acquired DebtIndebtedness) or and (y) the Company may issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, in each case 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.. The foregoing provisions will not apply to:
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more the New Senior Credit Facilities (and guarantees thereof by the Guarantors) in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (iix) $600.0 million;
million and (2y) the incurrence by the Company and its Restricted Subsidiaries sum of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.080% of Consolidated Net Tangible Assets Eligible Receivables and (ii) $20.0 million at any time outstanding;
(5) the incurrence by the Company or any 65% of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange forEligible Inventory, or the net proceeds of which are used to extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notesless, in the case of the Company, or the Guarantee, in the case each 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or and clause (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum aggregate amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.all Net
Appears in 2 contracts
Sources: Indenture (Tennessee Woolen Mills Inc), Indenture (Pillowtex Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (or, collectively, “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 Subsidiary to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the may permit a Restricted Subsidiaries may Subsidiary to incur Indebtedness or issue preferred stock, stock if at the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis time of such incurrence or issuance and after giving effect thereto (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will Leverage Ratio would be less than 7.0 to 1.0. The foregoing limitations shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Company 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 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 of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 3,260.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries issuance of the Existing IndebtednessNote Guarantees on the date hereof;
(3) the incurrence by the Company and the Subsidiary Guarantors Restricted Subsidiaries of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureExisting 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 issuance of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed Notes on the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingdate hereof;
(5) the incurrence by the Company or any of its and the Restricted Subsidiaries of Permitted Capital Lease Obligations, mortgage financings and/or additional Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or up to an aggregate at any one time outstanding of the net proceeds greater of which are used to extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtednessi) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a$250.0 million and (ii) or clause (2), (3), (4), (5), (16) or (17) 5.0% of this Section 4.11(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by the Company or any issuance of its Restricted Subsidiaries of intercompany Indebtedness or preferred stock between or among (i) the Company and any of its the 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Subsidiaries 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)Subsidiaries;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its and the Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(9) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) 8) the incurrence by the Company or any of its and the Restricted Subsidiaries of Indebtedness in respect of performance bonds, bankers’ acceptances, workers’ compensation claims; , surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements bank overdrafts (and, in all cases, and letters of credit in respect thereof) in the ordinary course of business;
(119) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) 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 (5) Business Days;
(11) the Guarantee by the Company or any Subsidiary Guarantor of Indebtedness of the Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of Indebtedness of another non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.10; provided that if the Indebtedness being Guaranteed is contractually subordinated to the Notes or the Note Guarantees, as applicable, then the Guarantee must be subordinated to the same extent as the Indebtedness Guaranteed;
(12) the incurrence by Foreign the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in an aggregate principal amount at any time outstanding pursuant exchange for, or the proceeds of which are used to repay, redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12), including all Permitted Refinancing Indebtedness incurred ) or clause (13) below or that was otherwise permitted to refund, refinance, defease, renew, extend or replace Indebtedness be incurred pursuant to the test set forth in the first paragraph of this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;Section 4.10; and
(13) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1613), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed $50.0 million. Notwithstanding the greater foregoing, Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to incur Indebtedness or issue preferred stock pursuant to the first paragraph of this Section 4.10 or clause (i13) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceabove if, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date aggregate principal amount of Indebtedness of such incurrence Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany Indebtedness between or issuanceamong the Company and the Restricted Subsidiaries) outstanding pursuant to such first paragraph or such clause, determined on a pro forma basis together with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (including a pro forma application of excluding intercompany preferred stock issued between or among the net proceeds therefromCompany and the Restricted Subsidiaries) as if outstanding pursuant to such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter periodprovisions, would be exceed the greater of (x) at least 2.0 to 1 or $1.25 billion and (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth 1.25x Adjusted EBITDA as of the Company would be greater than the Consolidated Net Worth any date of the Company immediately prior to such transaction.
(c) incurrence. The Company shall will not incur, and shall the Company will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or a Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.10, for the avoidance of doubt, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt permitted debt described in clauses (1) through (1713) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.10. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtabove. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.10; provided, in each such case, that the amount thereof is included in Fixed Charges the Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. Dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal, defeasance or exchange, 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 extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.114.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.10 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Senior Indenture (Iron Mountain Inc), Senior Indenture (Iron Mountain Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Company
(i) shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will and
(ii) shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and its Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of apply to any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of revolving credit Indebtedness and letter of credit obligations pursuant to the Revolving Credit Agreement in an aggregate principal amount not to exceed at the time of incurrence thereof the greater of (x) $275.0 million or (y) 70% of inventory plus 85% of accounts receivable (each as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, other than by reason of any Bankruptcy Law) at any one time outstanding, provided that such $275.0 million specified in clause (i)(x) above shall be permanently reduced by the aggregate amount of Indebtedness of all Receivables Subsidiaries of the Company and its Subsidiaries;
(ii) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented by the Debentures and by Finlay Jewelry of Indebtedness represented by the Senior Notes;
(iv) the incurrence by Finlay Jewelry of Indebtedness or other obligations in an aggregate principal amount of up to the greater of (x) $37.0 million and (y) 90% of the fair market value of the fine gold content of specified Consignment Inventory eligible to be consigned under (a) the Gold Consignment Agreement or (b) a substantially similar gold consignment agreement that Finlay Jewelry may enter into subsequent to the date of this Indenture which provides for the transfer of title to the gold content of Consignment Inventory from the relevant vendor to a gold consignor; provided that such $37.0 million specified in clause (x) above shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied to repay such Indebtedness pursuant to Section 4.10(b)(i) hereof;
(v) the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by Capital Lease Obligations, Obligations in aggregate principal amount not to exceed $4.0 million at any time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by 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 usable in a Permitted Businesssuch Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 4.0 million at any time outstanding;
(5vii) 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, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be is expressly subordinated subordinate (in accordance with the terms of this Indenture) to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; andDebentures and (y)
(B) (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 Wholly Owned 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 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);
(7ix) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging commodity price risk, entered into in the ordinary course of business and not for speculative purposes, to protect against fluctuations in the prices of raw materials used in the Company's or such Subsidiary's business in amounts reasonably related to such business;
(9xi) the guarantee incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging foreign exchange rate risk, entered into in the ordinary course of business and not for speculative purposes and in amounts reasonably related to the businesses of the Company and its Subsidiaries;
(xii) the incurrence by the Company or any of its Subsidiaries of Acquired Debt of a Person incurred prior to the date upon which such Person was (or such Person's assets were) acquired by the Company or any of its Subsidiaries (excluding Indebtedness incurred by such Person in connection with, or in contemplation of, such acquisition) in an aggregate principal amount not to exceed $10.0 million at any one time outstanding;
(xiii) the incurrence by the Company or any of its Subsidiaries of Indebtedness in respect of worker's compensation claims, self-insurance obligations, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Subsidiaries in the ordinary course of business;
(xiv) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from any agreement entered into by the Company or any of its Subsidiaries providing for indemnification, purchase price adjustment or similar obligations, in each case incurred or assumed in connection with any asset sale;
(xv) the incurrence of Indebtedness by the Company or any of its Subsidiaries in connection with a Guarantee of any Indebtedness of the Company or a Restricted Subsidiary any of the Company its Subsidiaries that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10xvi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) 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 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 Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into funds in the ordinary course of business;
(15) the incurrence by the Company ; provided, however, that such Indebtedness is extinguished within five Business Days of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityincurrence; and
(16xvii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (in addition to Indebtedness permitted by any other clause of this Section 4.09(b) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 40.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this the provisions of Section 4.114.09(b), 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 4.09(b)(i) through (17xvii) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 provisions of this Section 4.11; provided, in each 4.09 and such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount item of Indebtedness that the Company or any Restricted Subsidiary may incur will be treated as having been incurred pursuant to this only one of such clauses or pursuant to Section 4.11 shall not be deemed 4.09(a) hereof. Indebtedness permitted to be exceeded solely as a result of fluctuations in exchange rates incurred pursuant to Sections 4.09(b)(i) through (xvii) above may be incurred pursuant to one agreement or currency valuesseveral agreements with one lender or several lenders.
Appears in 2 contracts
Sources: Indenture (Finlay Enterprises Inc /De), Indenture (Finlay Enterprises Inc /De)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and neither the Company nor any Restricted Subsidiary will not issue any Disqualified Stock Stock, and will not permit neither the Company nor any of its Restricted Subsidiaries to Guarantor shall issue any shares of preferred stockPreferred Stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness or such Disqualified Stock is issued would have been at least 2.0 2.5 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a3.3(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of 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 (i) 30.0$50,000,000 or (ii) 20% of Adjusted Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries determined as of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 date of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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)Indebtedness;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock Disqualified Stock or Disqualified the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Indenture (Callon Petroleum Co), Indenture (Callon Petroleum Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will Issuer shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and any Restricted Subsidiary may issue Disqualified Preferred Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock is issued would have been at least 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified 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) The limitations set forth in Section 4.11(a4.2(a) will shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness under Credit Facilities together with the incurrence by of the Company or any Restricted Subsidiary guarantees thereunder and the issuance and creation 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) 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 of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million3,500.0 million outstanding at any one time;
(2) the incurrence Indebtedness represented by the Company and its Restricted Subsidiaries of Notes issued on the Existing IndebtednessIssue Date (including any Guarantee);
(3) the incurrence by the Company Existing Indebtedness (other than Indebtedness described in clauses (1) and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture(2));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred or issued 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 usable useful in a Permitted Business, Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amountamount that, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace defease or replace discharge any Indebtedness incurred pursuant to this clause (4), does not to exceed the greater of (ix) 1.0$400.0 million and (y) 5.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingTotal Assets;
(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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due constituting reimbursement obligations with respect to the Notes, in the case letters of the Company, or the 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations credit issued in the ordinary course of business and not for speculative purposes;
(9) the guarantee by the Company or any business, including without limitation letters of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness credit in respect of workers’ compensation claims; , health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or similar obligations; the financing of insurance premiums; bankersother Indebtedness with respect to reimbursement-type obligations regarding workers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of businesscompensation claims;
(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 Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for customary indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the acquisition or disposition of any business, assets of Issuer or subsidiary, any Restricted 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) and earnout provisions or contingent payments in respect of purchase price or adjustment of purchase price or similar obligations in acquisition agreements;
(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 or any Guarantor is the obligor on such 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 or of such Guarantor with respect to its Guarantee;
(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 maximum aggregate liability 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 the Indenture to be outstanding or (B) exchange rate risk with respect to any currency exchange or (C) commodity risk;
(10) obligations in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received performance, bid, appeal and surety bonds and performance and completion guarantees provided by the Company Issuer or such any Restricted Subsidiary or obligations in connection with such dispositionrespect of letters of credit related thereto, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(1411) Indebtedness of the incurrence 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 (x) $500.0 million and (y) 5.0% of Total Assets;
(12) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Restricted Subsidiary so long as the incurrence of such Indebtedness or obligations incurred by such Restricted Subsidiary is permitted under the terms of the 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 under Section 4.2(a) and clause (2), (3) or (4) above, this clause (13) or 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 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 Issuer or a Guarantor 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 fees and expenses incurred in connection with such Refinancing Indebtedness and (E) shall not have a stated maturity date prior to the Stated Maturity of the Indebtedness being refunded or refinanced;
(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 the 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 acquisition or merger, either (A) the Issuer or such Restricted Subsidiary would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.2(a) or (B) the 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 ordinary course of business, provided that such Indebtedness, other than credit or purchase cards, 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 consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply agreements entered into arrangements, in each case, in the ordinary course of business;
(1518) the incurrence by the Company Indebtedness of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Foreign Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness the Issuer incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical termsworking capital purposes; provided, however, that no the aggregate principal amount of Indebtedness will be deemed to be contractually subordinated in right Incurred under this clause (18) does not exceed the greater of payment to any other (x) $500.0 million and (y) 5.0% of the consolidated assets of the Foreign Subsidiaries;
(19) Indebtedness incurred on behalf of or representing Guarantees of Indebtedness of joint ventures not in excess of the Company solely greater of (x) $150.0 million and (y) 2.0% of Total Assets at any time outstanding;
(20) Indebtedness incurred by virtue a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary of being unsecured the Issuer other than a Securitization Subsidiary (except for Standard Securitization Undertakings);
(21) letters of credit issued for the account of a Restricted Subsidiary that is not a Guarantor (and the reimbursement obligations in respect of which are not guaranteed by a Guarantor) in support of a Captive Insurance Subsidiary’s reinsurance of insurance policies issued for the benefit of Restricted Subsidiaries and other letters of credit or by virtue bank guarantees having an aggregate face amount not in excess of being secured the greater of (x) $200.0 million and (y) 3.0% of Total Assets;
(22) Indebtedness of one or more Restricted Subsidiaries organized under the laws of the People’s Republic of China for their own general corporate purposes in an aggregate principal amount not to exceed $400.0 million at any time outstanding; and
(23) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on a first or junior Lien basisobligations described in clauses (1) through (22) above.
(dc) For purposes of determining compliance with this Section 4.11, 4.2,
(1) 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 (1723) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a4.2(a), the Company Issuer will be permitted to classify and later from time to time reclassify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. 4.2, and such item of Indebtedness will be treated as having been incurred pursuant to only one of such categories;
(2) 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 Debt shall be disregarded;
(3) 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 Section 4.2;
(4) Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Supplemental the Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause Section 4.2(b)(1);
(15) of the definition of Permitted Debt. The accrual of interestwhere Debt is denominated in a currency other than U.S. Dollars, the accretion or amortization amount of original issue discount, such Debt will be the payment U.S. Dollar Equivalent determined on the date 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 4.11such Incurrence; provided, in each such casehowever, that if any such Debt that is denominated in a different currency is subject to a currency Hedge Agreement with respect to U.S. Dollars covering principal payable on such Indebtedness, the amount thereof of such Indebtedness expressed in U.S. Dollars will be adjusted to take into account the effect of such agreement; provided further, however, that if any Indebtedness is included incurred to refinance other Indebtedness denominated in Fixed Charges a currency other than U.S. Dollars, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if the U.S. Dollar Equivalent is 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 (denominated in such non-U.S. dollar currency) does not exceed the principal amount of such Indebtedness being refinanced (denominated in the same currency) except to the extent that such U.S. Dollar Equivalent was determined based on a currency Hedge Agreement, in which case the principal amount of the Company as accrued. Notwithstanding any other provision of this Section 4.11, refinancing Indebtedness will be determined in accordance with the preceding sentence; and
(6) the maximum amount of Indebtedness that the Company or any Issuer and its Restricted Subsidiary Subsidiaries may incur pursuant to this Section 4.11 4.2 shall not be deemed to be exceeded exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rates or currency valuesrate of currencies.
Appears in 2 contracts
Sources: Second Supplemental Indenture (Celanese Corp), First Supplemental Indenture (Celanese CORP)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):prohibit:
(1i) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 1,700.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii) of this Section 4.09(b));
(3iii) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes (other than Additional Notes) and any Subsidiary Guarantees of the related Guarantees to be issued pursuant to this Supplemental Indentureforegoing;
(4a) the incurrence Indebtedness constituting Finance Lease Obligations and (b) Indebtedness, Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease, improvement, remodeling or refurbishing of Indebtedness represented by Capital Lease Obligations, mortgage financings property (real 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 personal) or equipment that is used or usable useful in a Permitted BusinessBusiness (but excluding the purchase of Capital Stock of any Person), in an provided that the aggregate principal amountamount of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv)(b) does not to exceed the greater of (i) 1.015.0% of Consolidated Net Tangible Assets and (iidetermined as of the time of such incurrence) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under this clause (v), Section 4.11(a4.09(a) or clause clauses (2ii), (3iii), (4iv), (5), (16x) or (17xvi) of this Section 4.11(b)4.09(b) and related interest, premiums, fees and other Obligations;
(6vi) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Indebtedness, Disqualified Stock or preferred stock 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 Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company will shall be deemed, in each casecase under this clause (vi)(B), 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9viii) the guarantee Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company Notes or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceGuarantee, as the case may be, by then the Company related Guarantee shall rank equally in right of payment to the Notes or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuanceGuarantee, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (yb) equal subordinated to the Notes or greater than it would have been immediately preceding such incurrence or (ii) a Subsidiary Guarantee, as the Consolidated Net Worth of case may be, then the Company would related Guarantee shall be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or such Subsidiary Guarantee, as the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.case may be;
(dix) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 and the incurrence of unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC Topic 815 and similar provisions), in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(x) 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 or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this Section 4.114.09(b); provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;
(xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(xiii) Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section 4.09), surety bonds, appeal bonds and other obligations (which, in each such case, that may be in the amount thereof is included form of or secured by letters of credit), in Fixed Charges each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as accruedapplicable) at any time outstanding not to exceed $600.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $300.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred 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 the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, 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 sentence of this Section 4.09, or
(B) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or exercise any other remedies with respect thereto until 91 days after the final Stated Maturity of the Notes; and
(xviii) Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from June 9, 2009 to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of such date to the second anniversary of such date and (iii) $60.0 million; provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation.
(c) No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes).
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) of Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to clause (i) of Section 4.09(b) and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under the Credit Agreement. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates rate of currencies. The principal amount of any Disqualified Stock of the Company or currency valuesa Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
(e) This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) Senior Debt that is secured Indebtedness as subordinated to any other Senior Debt that is secured Indebtedness merely because it has a junior priority with respect to the same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 2 contracts
Sources: Indenture (Cinemark Holdings, Inc.), Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 1,700.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii);
(3iii) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes (other than Additional Notes) and the related Exchange Notes issued in exchange therefor and any Subsidiary Guarantees to be issued pursuant to this Supplemental Indentureof the foregoing;
(4a) the incurrence Indebtedness constituting Capital Lease Obligations and (b) Indebtedness, Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligationsto 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 (other than software) that is used or usable useful in a Permitted BusinessBusiness (but excluding the purchase of Capital Stock of any Person), in an provided that the aggregate principal amountamount of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv)(b) when aggregated with the then outstanding amount of such obligations under clause (v) incurred to refinance such obligations initially incurred in reliance on this clause (iv)(b) does not to exceed the greater of (i) 1.07.5% of Consolidated Net Tangible Assets and (iidetermined as of the time of such incurrence) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or this clause (2v), the first paragraph of this Section 4.09 or clauses (ii), (3iii), (4iv), (5), (16x) or (17xvi) of this Section 4.11(b)paragraph and related interest, premiums, fees and other Obligations;
(6vi) 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:
(Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Indebtedness, Disqualified Stock or preferred stock 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 Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company will shall 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9viii) the guarantee Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company Notes or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceGuarantee, as the case may be, by then the Company related Guarantee shall rank equally in right of payment to the Notes or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuanceGuarantee, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (yb) equal subordinated to the Notes or greater than it would have been immediately preceding such incurrence or (ii) a Subsidiary Guarantee, as the Consolidated Net Worth of case may be, then the Company would related Guarantee shall be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or such Subsidiary Guarantee, as the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.case may be;
(dix) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 and the incurrence of unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC Topic 815 (formerly SFAS 133) and similar provisions), in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.11covenant;
(x) 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 or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this paragraph; provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;
(xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(xiii) Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section 4.09), surety bonds, appeal bonds and other obligations (which, in each such case, that may be in the amount thereof is included form of or secured by letters of credit), in Fixed Charges each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as accruedapplicable) at any time outstanding not to exceed $500.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $100.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred 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 the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, 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 sentence of this Section 4.09, or
(b) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or exercise any other remedies with respect thereto until 91 days after the Stated Maturity of the Notes; and
(xviii) Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from the Start Date to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of the Start Date to the second anniversary of the Start Date and (iii) $60.0 million after the second anniversary of the Start Date; provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation. Neither the Company nor any Restricted Subsidiary shall incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness subordinated to the Notes or any Subsidiary Guarantee unless such Indebtedness shall be subordinated to the Notes or such Subsidiary Guarantee to at least the same extent as such subordinated Indebtedness. No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes). For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to clause (i) above and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under the Credit Agreement. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates rate of currencies. The principal amount of any Disqualified Stock of the Company or currency valuesa Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof. This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) Senior Debt that is secured Indebtedness as subordinated to any other Senior Debt that is secured Indebtedness merely because it has a junior priority with respect to the same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 2 contracts
Sources: Indenture (Cinemark Holdings, Inc.), Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”;” with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock Stock, and the Company’s Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt) and 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, the provisions of Section 4.11(a5.7(a) hereof will not prohibit the incurrence of any of the following (the items of Indebtedness described below in this paragraph (collectively, b) being referred to collectively as “Permitted Debt”):
(1i) the incurrence by the Company or and 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 (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 (i1) 30.0$275.0 million or (2) 25% of Consolidated Net Tangible Assets or Assets; provided, that the maximum amount permitted to be outstanding under this clause (i) 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 of this Section 5.7;
(ii) $600.0 millionthe incurrence of Existing Indebtedness;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indentureon the Issue Date;
(4iv) the incurrence by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company 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, deployment, refurbishment, modification or improvement lease of property, plant or equipment or furniture, fixtures and equipment, in each case used in the business of the Company or usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 25.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture Agreement to be incurred under Section 4.11(a5.7(a) hereof or clause clauses (2ii), (3iii), (4iv), (5v), (16xiii), (xv) or (17xvi) of this Section 4.11(b5.7(b);
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owing to and held by the Company and or 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 the Company or a Restricted Subsidiary of the Company and 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 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 shares of preferred stock; provided, however, that:
(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 or a Restricted Subsidiary of the Company; and
(B2) 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 (7vii);
(8) viii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(9) the guarantee a Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.115.7; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesSubordinated Indebtedness, then the guarantee Guarantee shall be subordinated to the same extent as the contractual subordination applicable to the Indebtedness guaranteed;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in respect the ordinary course of workers’ compensation claimsbusiness; self-insurance provided that, upon the drawing of such letters of credit or similar obligations; the incurrence of such Indebtedness, such obligations are reimbursed within one year following such drawing or incurrence;
(x) the incurrence by the Company of Indebtedness to the extent that the net proceeds thereof are promptly deposited to fully defease or to fully satisfy and discharge the Notes;
(xi) Indebtedness consisting of the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee premiums in customary amounts consistent with the operations and surety bonds; or similar requirements (and, in all cases, letters business of credit in respect thereof) the Company and its Restricted Subsidiaries in the ordinary course of business;
(11xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiary, other than guarantees Capital Stock of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisitiona 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 or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;
(14xiii) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained Permitted Public Finance Instruments not to exceed $175.0 million in supply agreements entered into in the ordinary course of businessaggregate principal amount at any one time outstanding;
(15xiv) the incurrence by of the Company EB-5 Preferred Stock; provided that if the EB-5 Preferred Stock constitutes Disqualified Stock, the aggregate liquidation preference EB-5 Preferred Stock that may be incurred pursuant to this clause 5.7(b)(xiv) shall not exceed $50.0 million;
(xv) the incurrence of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPermitted Acquisition Indebtedness; and
(16xvi) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16xvi), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed (a) the greater of $25.0 million or (ib) 5.010% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionTangible Assets.
(c) The Notwithstanding the foregoing provisions of this Section 5.7, the Company shall will not incur, and shall not at any time permit any Subsidiary Guarantor Consolidated Net Funded Debt to incur, any Indebtedness exceed the sum of (including Permitted Debti) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness $300.0 million plus (ii) the aggregate principal amount of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) Exempt Funded Debt. For purposes of determining compliance with this Section 4.115.7, 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 (17xvi) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)5.7(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.115.7. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture Agreement 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 Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.115.7; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.115.7, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 5.7 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:
(i) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(ii) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at the date of determination; and
(B) the amount of the Indebtedness of the other Person; and
(iii) the principal amount of the Indebtedness, in the case of any other Indebtedness.
Appears in 2 contracts
Sources: Note Purchase Agreement (Hall of Fame Resort & Entertainment Co), Note Purchase Agreement (Hall of Fame Resort & Entertainment Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its the 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), none of the Company or any of the Restricted Subsidiaries will issue any Disqualified Stock, and the Company will not, and the Company will not issue any Disqualified Stock and will not permit any of its the Restricted Subsidiaries to to, issue any shares of preferred stock; provided, however, that the Company or any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue other shares of preferred stock, if the Fixed Charge Consolidated Interest Coverage Ratio of the Company and the Restricted Subsidiaries on a consolidated basis for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or other shares of preferred stock is issued, as the case may be, would have been at least 2.0 to 11.0, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretoNet Proceeds therefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or other shares of preferred stock or Disqualified 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 4.11(a4.08(a) (“Incurrence of Indebtedness and Issuance of Preferred Stock”) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any Restricted Subsidiary and the Guarantors of Indebtedness and letters of credit under one or more a Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Facility (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries the Guarantors thereunder) in a maximum aggregate principal amount under this clause (1) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or $175.0 million plus (ii) an amount not to exceed $600.0 million125.0 million less the Indebtedness represented by the Notes then outstanding;
(2) the incurrence by the Company and its Restricted Subsidiaries any Guarantor of Indebtedness (including any subsequent accretion) represented by the Secured Convertible Notes to be issued on the Issue Date (or that may be issued pursuant to awards granted from time to time under the Management Incentive Plan in a maximum principal amount not in excess of the Existing Indebtednessmaximum principal amount issuable pursuant to the Management Incentive Plan as in effect on the Issue Date and in compliance with the terms of the Secured Convertible Indenture) and any guarantees thereof;
(3) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indentureon the Issue Date;
(4) the incurrence by the Company or any Restricted Subsidiary of its Existing Indebtedness (other than Indebtedness described in clauses (1), (2) and (3) of this Section 4.08(b));
(5) the incurrence by the Company or 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 usable such Restricted Subsidiary, provided that the Company would be able to incur at least $1.00 of additional Indebtedness pursuant to the ratio set forth in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Section 4.08(a) after giving effect to the incurrence of any such Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstanding;
(56) Indebtedness of the Company and the Restricted Subsidiaries incurred and outstanding on or prior to the date on which a new Subsidiary was acquired by 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 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, the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to the ratio set forth in clause (a) 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 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.08(a) or clause clauses (1), (2), (3), (4), (5), (166) or this clause (177) of this Section 4.11(b4.08(b), provided that, with respect to any such debt incurred pursuant to Section 4.08(a) or clauses (1) or (2) of this Section 4.08(b), an authorized representative on behalf of the holders or lenders of such Indebtedness, as applicable, shall execute a joinder, supplement or amendment to the Intercreditor Agreements pursuant which the holders or lenders of such Indebtedness, as applicable, and any agent, trustee or person or institution holding a similar title therefor shall become bound by, and subject to the terms of, the Intercreditor Agreements;
(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:
(A1) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorRestricted Subsidiary, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in Notes and the case of the Company, or the Guarantee, in the case of a Subsidiary GuarantorNote Guarantees; 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 or a Restricted Subsidiary of the Company and Subsidiary, or (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 Subsidiary, 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(910) the guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a any Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.08; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness in respect of workers’ compensation claims, self-insurance obligations, bankers’ acceptances, and performance and surety bonds in the ordinary course of business;
(12) the incurrence by the Company or any 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;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in each case, any case incurred in connection with the disposition of any business, assets or subsidiary, Restricted Subsidiary (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary Restricted Subsidiary for the purpose of financing such acquisition; provided that ), so long as the maximum aggregate liability in respect of all such Indebtedness shall at no time amount does not exceed the gross proceeds actually received by the Company or such any Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1614), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 75.0 million; and
(1715) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided Indebtedness with respect to equipment mobilization expenditures that immediately after giving effect are committed to such incurrence or issuance, as the case may be, be reimbursed by any Person party to a Drilling Contract in an aggregate amount not to exceed (ia) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available $50.0 million in accordance with Section 1.13 preceding the date respect of such incurrence or issuance, determined on a pro forma basis each Deepwater Vessel and (including a pro forma application b) $25.0 million in respect of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued each Jackup Rig at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth any time outstanding. None of the Company would be greater than the Consolidated Net Worth or any of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, Restricted Subsidiaries will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Restricted 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 will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Indenture (Vantage Drilling International), Indenture (Vantage International Management Pte Ltd.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); the Company will not, and will not permit any of its Restricted Subsidiaries to, 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 shares of other preferred stocksecurities; provided, however, that the Company and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and any of the Company’s Restricted Subsidiaries may incur Indebtedness or issue other preferred stocksecurities, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or other preferred securities are issued, the Fixed Charge Coverage Ratio would have been at least 2.0 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or other preferred securities had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or the issuance of any Disqualified Stock described in clause (15) below (collectively, “Permitted Debt”):) or the issuance of any preferred securities described in clause (11) below:
(1) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness and letters of credit under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) and then outstanding does not to exceed the greater of (ia) 30.0$1,000.0 million or (b) $475.0 million plus 35.0% of the Company’s Adjusted Consolidated Net Tangible Assets or (ii) $600.0 millionAssets;
(2) the incurrence by the Company and or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company Issuers and the Subsidiary Guarantors of Indebtedness represented by (a) the Initial Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and (b) the Exchange Notes and the related Subsidiary Guarantees issued pursuant to this Supplemental Indentureany 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 usable in a Permitted Business, in an aggregate principal amountsuch Restricted Subsidiary, including all Permitted Refinancing Indebtedness incurred to refundextend, refinance refinance, renew, replace, defease, refund or replace discharge 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) 1.0$25.0 million or (b) 2.5% of the Company’s Adjusted Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingsuch time;
(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 extend, refund, refinance, renew, defease replace, defease, refund or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) or clause (2), (3), (4), (5), (1615) or (1716) of this Section 4.11(b4.09(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 a Guarantor is not the Company or a Subsidiary Guarantorobligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Companynotes, or if a Guarantor is the Guaranteeobligor on such Indebtedness and neither the Company nor another Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the case Subsidiary Guarantee of a Subsidiary 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 issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of obligations under Hedging Obligations in the ordinary course of business and not for speculative purposesContracts;
(9) 8) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a any of its Restricted Subsidiary of the Company Subsidiaries that was permitted to be incurred by another provision of this Section 4.11; provided that if 4.09;
(9) the Indebtedness being guaranteed is subordinated incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to or pari passu with net Hydrocarbon balancing positions arising in the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedordinary course of business;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance obligations or similar obligations; the financing of insurance premiums; bankers’ acceptances; performancebid, plugging and abandonment, appeal, bid completionreimbursement, guarantee performance, surety and surety bonds; similar bonds and completion guarantees issued or similar requirements (and, in all cases, letters provided for the account of credit in respect thereof) the Company and any of its Restricted Subsidiaries in the ordinary course of business, including guarantees and obligations of the Company or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(11) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of any preferred securities; provided, however, that:
(a) any subsequent issuance or transfer of Equity Interests that results in any such preferred securities being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(b) any sale or other transfer of any such preferred securities to a Person that is neither the Company nor a Restricted Subsidiary of the Company, will be deemed, in each case, to constitute an issuance of such preferred securities by such Restricted Subsidiary that was not permitted by this clause (11);
(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;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness any obligation arising from agreements of the Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or subsidiaryCapital Stock of a Restricted Subsidiary of the Company in a transaction permitted by this Indenture, other than guarantees provided such obligation is not reflected on the face of Indebtedness incurred by any Person acquiring all or any portion the balance sheet 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 shall at no time exceed the gross proceeds actually received by the Company or such any Restricted Subsidiary in connection with such dispositionof the Company;
(14) the incurrence by the Company or any of its Restricted Subsidiaries of liability in respect of the Indebtedness of any Unrestricted Subsidiary or any Joint Venture but only to the extent that such liability is the result of the Company’s or any such Restricted Subsidiary’s being a Restricted 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 consisting and provided that after giving effect to any such incurrence, the aggregate principal amount of take-or-pay obligations contained in supply agreements entered into in the ordinary course of businessall Indebtedness incurred under this clause (14) and then outstanding does not exceed $25.0 million;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPermitted Acquisition Indebtedness; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Restricted Subsidiary of any additional preferred stockIndebtedness incurred or Disqualified Stock issued pursuant to this clause (16), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets $50.0 million and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary 5.0% of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Adjusted Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) Tangible Assets. The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or the applicable Subsidiary Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1716) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a4.09(a), the Company will be permitted to classify divide, classify, redivide and reclassify such item of Indebtedness on the date of its incurrence, or later divide, classify, redivide or reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Any Indebtedness outstanding under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under of 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 Debtunder Section 4.09(a). 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 securities 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 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11Further, the maximum amount accounting reclassification of Indebtedness that any obligation of the Company or any of its Restricted Subsidiary may incur pursuant to this Section 4.11 shall Subsidiaries as Indebtedness will not be deemed to be exceeded solely as a result an incurrence of fluctuations in exchange rates or currency valuesIndebtedness for purposes of this Section 4.09.
Appears in 2 contracts
Sources: Indenture (Legacy Reserves Inc.), Indenture (Legacy Reserves Lp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Indenture (Ion Geophysical Corp), Indenture (Coeur D Alene Mines Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ; neither the Company nor any Guarantor shall issue any Disqualified Stock; and the Company will not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of preferred stock; provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The provisions of the first paragraph of this covenant will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Indenture (Diamond Brands Inc), Indenture (Diamond Brands Operating Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Company
(i) shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will and
(ii) shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and its Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of apply to any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of revolving credit Indebtedness and letter of credit obligations pursuant to the Revolving Credit Agreement in an aggregate principal amount not to exceed at the time of incurrence thereof the greater of (x) $275.0 million or (y) 70% of inventory plus 85% of accounts receivable (each as determined in accordance with GAAP, but excluding accounts receivable that are past due by more than 60 days, other than by reason of any Bankruptcy Law) at any one time outstanding, provided that such $275.0 million specified in clause (i)(x) above shall be permanently reduced by the aggregate amount of Indebtedness of all Receivables Subsidiaries of the Company and its Subsidiaries;
(ii) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented by the Notes;
(iv) the incurrence by Finlay Jewelry of Indebtedness or other obligations in an aggregate principal amount of up to the greater of (x) $37.0 million and (y) 90% of the fair market value of the fine gold content of specified Consignment Inventory eligible to be consigned under (a) the Gold Consignment Agreement or (b) a substantially similar gold consignment agreement that Finlay Jewelry may enter into subsequent to the date of this Indenture which provides for the transfer of title to the gold content of Consignment Inventory from the relevant vendor to a gold consignor; provided that such $37.0 million specified in clause (x) above shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied to repay such Indebtedness pursuant to Section 4.10(b)(i) hereof;
(v) the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by Capital Lease Obligations, Obligations in aggregate principal amount not to exceed $4.0 million at any time outstanding;
(vi) the incurrence by the Company or any of its Subsidiaries of Indebtedness represented by 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 usable in a Permitted Businesssuch Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 4.0 million at any time outstanding;
(5vii) 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, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(6viii) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Finlay Enterprises, the Company and any of its Restricted Wholly Owned Subsidiaries; provided, however, that:that (x) if the Company
(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Finlay Enterprises, the Company or a Restricted Wholly Owned Subsidiary of the Company and (iiB) any sale or other transfer of any such Indebtedness to a Person that is not either Finlay Enterprises, 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);
(7ix) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging commodity price risk, entered into in the ordinary course of business and not for speculative purposes, to protect against fluctuations in the prices of raw materials used in the Company's or such Subsidiary's business in amounts reasonably related to such business;
(9xi) the guarantee incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging foreign exchange rate risk, entered into in the ordinary course of business and not for speculative purposes and in amounts reasonably related to the businesses of the Company and its Subsidiaries;
(xii) the incurrence by the Company or any of its Subsidiaries of Acquired Debt of a Person incurred prior to the date upon which such Person was (or such Person's assets were) acquired by the Company or any of its Subsidiaries (excluding Indebtedness incurred by such Person in connection with, or in contemplation of, such acquisition) in an aggregate principal amount not to exceed $10.0 million at any one time outstanding;
(xiii) the incurrence by the Company or any of its Subsidiaries of Indebtedness in respect of worker's compensation claims, self-insurance obligations, performance, surety and similar bonds and completion guarantees provided by the Company or any of its Subsidiaries in the ordinary course of business;
(xiv) the incurrence by the Company or any of its Subsidiaries of Indebtedness arising from any agreement entered into by the Company or any of its Subsidiaries providing for indemnification, purchase price adjustment or similar obligations, in each case incurred or assumed in connection with any asset sale;
(xv) the incurrence of Indebtedness by the Company or any of its Subsidiaries in connection with a Guarantee of any Indebtedness of the Company or a Restricted Subsidiary any of the Company its Subsidiaries that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10xvi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) 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 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 Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into funds in the ordinary course of business;
(15) the incurrence by the Company ; provided, however, that such Indebtedness is extinguished within five Business Days of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityincurrence; and
(16xvii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (in addition to Indebtedness permitted by any other clause of this Section 4.09(b) in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 40.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this the provisions of Section 4.114.09(b), 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 4.09(b)(i) through (17xvii) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 provisions of this Section 4.11; provided, in each 4.09 and such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount item of Indebtedness that the Company or any Restricted Subsidiary may incur will be treated as having been incurred pursuant to this only one of such clauses or pursuant to Section 4.11 shall not be deemed 4.09(a) hereof. Indebtedness permitted to be exceeded solely as a result of fluctuations in exchange rates incurred pursuant to Sections 4.09(b)(i) through (xvii) above may be incurred pursuant to one agreement or currency valuesseveral agreements with one lender or several lenders.
Appears in 2 contracts
Sources: Indenture (Finlay Enterprises Inc /De), Indenture (Finlay Fine Jewelry Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, not and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for Leverage Ratio, as of the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 Calculation Date, would have been at least 2.0 no greater than (i) 4.25 to 1 in the case of any incurrence or issuance on or before December 31, 2013, (ii) 4.00 to 1 in the case of any incurrence or issuance on or after January 1, 2014 and on or before December 31, 2014, and (iii) 3.50 to 1 in the case of any incurrence or issuance on or after January 1, 2015, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at as of the beginning of such four-quarter periodCalculation Date.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit prohibit, so long as no Default or Event of Default has occurred and is continuing, the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3ii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenturein accordance with the terms and conditions of the Plan;
(4iii) 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 (whether in an asset acquisition or acquisition of Equity Interests) or cost of design, construction, installation or improvement of property, plant or equipment used in the Permitted Business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4iii), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million U.S.$15,000,000 at any time outstanding;
(5iv) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph of this covenant or clause clauses (2i), (3), (4), (5), (16ii) or (17iii) of this Section 4.11(b4.09(b);
(6v) the incurrence by the Company or any of its Wholly-Owned Restricted Subsidiaries of intercompany Intercompany Indebtedness between or among the Company and any of its Wholly-Owned 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 GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due obligations 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 the Company or a Wholly-Owned 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 Wholly-Owned 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 (6v);; and
(7C) such Indebtedness is otherwise incurred in accordance with Section 4.23 hereof.
(vi) the issuance by any of the Company’s Wholly-Owned Restricted Subsidiaries to the Company or to any of its Wholly-Owned Restricted Subsidiaries that is a Guarantor of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company; andCompany that is a Guarantor;
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company; Company that is a Guarantor, and
(C) 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 (7vi);
(8) vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations for the purpose of managing the Company’s (or any Restricted Subsidiary’s) exposure to fluctuations in interest rates with respect to Indebtedness permitted to be Incurred by the Company pursuant to this Indenture or protecting the Company (or its Restricted Subsidiaries) against currency fluctuations in the ordinary course of business and not for speculative purposes;
(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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee shall 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 constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business in respect of workers’ compensation claims; claims or self-insurance insurance, or similar obligations; the financing of insurance premiums; bankersother Indebtedness with respect to reimbursement type obligations regarding workers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of businesscompensation claims;
(11x) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness consisting of performance and other similar bonds and reimbursement obligations Incurred by the Company or any Restricted Subsidiaries Subsidiary securing the performance of contractual, franchise, concession or license obligations of the Company or a Restricted Subsidiary;
(xi) Attributable Debt with Respect to a Sale and Leaseback Transaction to the extent such Sale and Leaseback Transaction complies with the provisions under Section 4.20;
(xii) 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;
(12xiii) Indebtedness of the incurrence by Foreign Subsidiaries Company, to the extent the net proceeds thereof in their entirety are (i) used solely to purchase Notes tendered in a Change of Control Offer or (ii) concurrently deposited to defease the Notes as described under Article XII hereof;
(xiv) Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater consisting of (i) 5.0% the financing of Consolidated Net Tangible Assets and insurance premiums or (ii) $100.0 million;
(13) the incurrence by the Company take or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationspay obligations in supply agreements, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into case in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16xv) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16xv), and but excluding the issuance indebtedness permitted by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stockclauses (i) through (xiv), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) U.S.$20,000,000. The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xv) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 Debt4.09. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, the reclassification of accounts payable as Indebtedness and the payment of dividends on Disqualified Stock or preferred stock of Restricted Subsidiaries in the form of additional shares of the same class of Disqualified Stock or preferred stock of Restricted Subsidiaries will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock of Restricted Subsidiaries for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges Consolidated Interest Expense of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 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. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate determined as the average daily observed currency exchange rates reported by the Federal Reserve Bank of New York for the trailing 30 calendar day period, including the date of incurrence, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such refinancing indebtedness is denominated calculated based on the relevant currency exchange rates as calculated in the first sentence of this paragraph.
Appears in 2 contracts
Sources: Indenture (Maxcom Telecommunications Inc), Indenture (Maxcom Telecommunications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and Issuer will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company Issuer or any Subsidiary Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries (which may incur Indebtedness or issue preferred stock, be guaranteed by any Subsidiary Guarantor) if the Fixed Charge Coverage Debt to Adjusted Cash EBITDA Ratio for the CompanyIssuer’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred would have been at least 2.0 be less than or equal to 14.50 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction the application of proceeds therefrom had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, occurred at the beginning of such four-quarter period.
(b) In addition to the limitation imposed by Section 4.11(a4.03(a), any issuance of Additional Notes shall be subject to further requirements that the Issuer shall, at its sole cost and expense, have performed or caused to be performed all acts and executed any and all documents (including, without limitation, the authorization of any financing statement and continuation statement) for filing under the provisions of the Uniform Commercial Code or under any other statute, rule or regulation of any applicable federal, state or local jurisdiction, including any filings in local real estate land record offices, which are necessary or reasonably requested by the Trustee in order to grant and confirm the validity, perfection and first priority (subject to Permitted Liens) of the Liens in favor of the Trustee for the benefit of the Holders.
(c) The limitations set forth in Section 4.03(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Company or Issuer and any Restricted Subsidiary Subsidiaries of revolving credit 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 (A) the greater of (ix) 30.0$30.0 million and (y) 25% of Consolidated Net Tangible Assets Adjusted Cash EBITDA for the Issuer’s most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred less (B) the stated amount of all letters of credit, bankers’ acceptances, similar instruments or performance bonds outstanding pursuant to clause (xix) below;
(ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes (other than Additional Notes) and any Guarantees thereof issued on the Issue Date and the Exchange Notes and the related Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4iii) Indebtedness existing on the incurrence by the Company or any of its Restricted Subsidiaries of Issue Date (other than Indebtedness represented by Capital described in clauses (i) and (ii) above);
(iv) Indebtedness (including Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, ) incurred for or issued by the purpose of financing Issuer or any Restricted Subsidiary to finance all or any part of the purchase price or cost of designpurchase, construction, installation lease or improvement of propertyproperty (real or personal), plant or equipment that is used or usable useful in a Permitted Business, in Business up to an aggregate principal amountamount that, including when aggregated with the principal amount of all Permitted Refinancing other Indebtedness incurred to refund, refinance or replace any Indebtedness then outstanding and incurred pursuant to this clause (4iv), does not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 25.0 million outstanding at any time outstandingone time, so long as such Indebtedness exists at the date of such purchase, lease or improvement, or is created within 180 days thereafter;
(5v) 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due constituting reimbursement obligations with respect to the Notes, in the case letters of the Company, or the 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations credit issued in the ordinary course of business business, including, without limitation, letters of credit, bankers’ acceptances, performance 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notessurety bonds, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness obligations in respect of workers’ compensation claims; , health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or similar obligationsother Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims; provided, however, that upon the financing drawing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, such letters of credit in respect thereof) in the ordinary course of businesscredit, such obligations are reimbursed within 30 days following such drawing;
(11vi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company Issuer or such a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, case incurred or assumed in connection with the disposition or acquisition of any business, assets or subsidiarya Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary a Subsidiary for the purpose of financing such acquisition; provided 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 aggregate 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 or such Issuer and any Restricted Subsidiary Subsidiaries in connection with such disposition;
(14vii) Indebtedness of the incurrence Issuer owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company 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 or any Subsidiary Guarantor is the obligor on such Indebtedness owing to a Restricted Subsidiary that is not a Subsidiary Guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of Indebtedness consisting all obligations of take-or-pay obligations contained the Issuer with respect to the Notes or of such Subsidiary Guarantor with respect to its Guarantee;
(viii) 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 supply agreements any such Restricted Subsidiary that holds such shares of Preferred Stock of another 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 by such Restricted Subsidiary;
(ix) Hedging Obligations of the Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) in the ordinary course of business;
(15x) obligations in respect of performance, bid, appeal 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;
(xi) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any other Restricted Subsidiary so long as the incurrence of such Indebtedness incurred by such Restricted Subsidiary is permitted under the terms of this Indenture;
(xii) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (exchange for, or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16as permitted under Section 4.03(a) and Sections 4.03(c)(ii), (iii), (iv), (xvii), (xviii) and (xix) and this Section 4.03(c)(xii) or any Indebtedness issued in exchange for or to so renew, refund, refinance, replace, defease or discharge such Indebtedness including additional Indebtedness incurred to pay premiums and fees in connection therewith (the issuance by “Refinancing Indebtedness”) prior to its maturity; provided, however, that such Refinancing Indebtedness (A) has a Weighted Average Life to Maturity at the Company time such Refinancing Indebtedness is incurred which is not less than the remaining Weighted Average Life to Maturity of any Disqualified Stock and by any the Indebtedness being refunded or refinanced, (B) to the extent such Refinancing Indebtedness refinances Indebtedness ranking pari passu with or subordinated to the Notes, such Refinancing Indebtedness ranks pari passu with or is subordinated to the Notes at least to the same extent as the Indebtedness being refinanced or refunded, (C) shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of any additional preferred stockan Unrestricted Subsidiary, (D) shall not include Indebtedness of a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of the Issuer, (E) 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, (F) shall not amortize prior to exceed the greater Stated Maturity of (i) 5.0% of Consolidated Net Tangible Assets the Indebtedness being refunded or refinanced and (iiG) $100.0 million; andshall not have a Stated Maturity prior to the Stated Maturity of the Indebtedness being refunded or refinanced;
(17xiii) Indebtedness arising from the incurrence honoring by a bank or issuanceother financial institution of a check, as draft or similar instrument drawn against insufficient funds in the case may beordinary course of business, by provided that such Indebtedness, other than credit or purchase cards, is extinguished within five business days of its incurrence;
(xiv) Indebtedness consisting of the Company financing of insurance premiums in the ordinary course of business;
(xv) Indebtedness of the Issuer or any Restricted Subsidiary of Acquired Debtthe Issuer supported by a letter of credit issued pursuant to any Credit Facility in a principal amount not in excess of the stated amount of such letter of credit;
(xvi) Indebtedness incurred by the Issuer or any Restricted Subsidiary with respect to the repurchase, Acquired Preferred Stock retirement or Acquired Disqualified Stockother acquisition or retirement for value of common Equity Interests of the Issuer or any of its direct or indirect parent entities held by any future, present or former employee, director or consultant of the Issuer or any of its Subsidiaries or (to the extent such person renders services to the businesses of the Issuer and its Subsidiaries) the Issuer’s direct or indirect parent entities, pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or arrangement; provided, however, that the aggregate amount of all such Indebtedness does not exceed of $2.5 million outstanding at any one time;
(xvii) Indebtedness incurred or issued by the Issuer or any Restricted Subsidiary to finance the procurement, construction and/or launch of one or more Satellites after the Issue Date in an amount outstanding at any one time not to exceed $50.0 million; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (iw) the Fixed Charge Coverage Secured Debt to Adjusted Cash EBITDA Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined is less than 3.25 to 1.00 on a pro forma basis (including a pro forma application of the net proceeds therefrom), (x) as if such Acquired DebtIndebtedness is secured by Liens on a first-priority basis, Acquired Preferred Stock a responsible financial or Acquired Disqualified Stock had accounting officer of the Issuer shall certify in an Officers’ Certificate that the Issuer is able to Fully Fund such Satellite or Satellites and at the time of such incurrence or issuance, the Issuer or a Restricted Subsidiary shall have been selected by the National Geospatial-Intelligence Agency for an award with respect to such Satellite and (y) all net proceeds from Indebtedness incurred or issued at under this clause (xvii) shall be deposited directly into the beginning Satellite Construction Collateral Account and shall only be available to the Issuer or the Restricted Subsidiaries (i) for use in connection with the procurement, construction and/or launch of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence Satellite or (ii) to make a Restricted Proceeds Offer in accordance with the Consolidated Net Worth procedures set forth in Section 4.17. If any net proceeds remain after consummation of such a Restricted Proceeds Offer, the Company would be greater than the Consolidated Net Worth Issuer may use that remaining amount of the Company immediately prior to such transaction.net proceeds for any purpose not otherwise prohibited by this Indenture;
(cxviii) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company Issuer or such any Restricted Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right equal to 100% of payment the net cash proceeds from the sale of its Equity Interests (other than Disqualified Stock) or from any equity contribution received by the Issuer from a holder of the Issuer’s Equity Interests subsequent to the Notes Issue Date to the extent such net cash proceeds have not been applied pursuant to clause (3)(w) or (3)(x) of Section 4.04(a) or Section 4.04(b)(iv)(A) to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.04(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the applicable Guarantee definition thereof);
(xix) obligations of the Issuer or any of its Restricted Subsidiaries in respect of letters of credit, bankers’ acceptances or similar instruments issued to, or performance bonds posted to, customers participating in any program whereby customers, with approval from the U.S. government, purchase equipment and software necessary to allow access to Issuer’s Satellites and purchase access time on substantially identical terms; providedsuch Satellites and secured by cash collateral, howeverbut in each case neither the stated amount of such letter of credit, that no Indebtedness will be deemed bankers’ acceptance, similar instrument or performance bond nor the cash collateral maintained therefor shall at any time exceed (A) the amount of cash proceeds received from such customer or one of its affiliates as a prepayment or deposit to be contractually subordinated secure payment of amounts due or to become due from such customer under the relevant contracts minus (B) the amount of such cash proceeds theretofore released in right payment of payment to the Issuer or any other of its Subsidiaries under such contracts;
(xx) Indebtedness of the Company solely by virtue Issuer or any Restricted Subsidiary incurred on or after the Issue Date in an aggregate principal amount outstanding at any one time not to exceed $50.0 million; provided that, in the case of being unsecured a Restricted Subsidiary that is not a Subsidiary Guarantor, the aggregate principal amount of such Indebtedness outstanding at any one time shall not exceed $5.0 million; and
(xxi) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or by virtue of being secured contingent interest on a first or junior Lien basisobligations described in clauses (i) through (xx) above.
(d) Except as permitted by clauses (viii) and (xx) above, under no circumstances will any Restricted Subsidiary issue any Preferred Stock. For purposes of determining compliance with this Section 4.114.03, 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 (1i) through (17xxi) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a4.03(a), the Company Issuer will be permitted to classify all or a portion of such item of Indebtedness on the date of its incurrence, incurrence or later reclassify all or a portion of such item of Indebtedness, Indebtedness in any manner that complies with this Section 4.11. 4.03, and all or a portion of such item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have treated as having been incurred on such date in reliance on pursuant to only the exception provided by clause category for which it is classified or reclassified (1) of the definition of Permitted Debtas applicable). The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.Prefe
Appears in 2 contracts
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company Borrower will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company Borrower may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the CompanyBorrower’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 “Other Reports” below would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The provisions described in the preceding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 2 contracts
Sources: Loan Agreement (Westlake Chemical Corp), Loan Agreement (Westlake Chemical Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 (a) 2.25 to 1, if the date of such incurrence or issuance is on or prior to December 15, 2007, or (b) 2.50 to 1, if the date of such incurrence or issuance is after December 15, 2007, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any Restricted Subsidiary 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 $480.0 million less the greater aggregate amount of all mandatory repayments of the principal of any term Indebtedness under Credit Facilities (iother than repayments that are concurrently refunded or refinanced) 30.0% that have been made by the Company or any of Consolidated its Restricted Subsidiaries since the Issue Date and less the aggregate amount of all Net Tangible Assets Proceeds of Asset Sales applied by the Company or (ii) $600.0 millionany of its Restricted Subsidiaries since the Issue Date to permanently repay any term 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 Company and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the Issue Date and the Exchange Notes and the related Note Guarantees to be issued pursuant to this Supplemental IndentureIndenture and 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 financings, purchase money obligations or similar obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, use, installation or improvement of property, plant or equipment used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (1611) or (1712) of this Section 4.11(b4.09(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 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 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 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; , will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not other than 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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu in right of payment with the Notes, then the guarantee Guarantee shall be subordinated or pari passu in right of payment, 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 or similar obligations; the financing of insurance premiums; , bankers’ ' acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; , completion guarantees, standby letters of credit, statutory claims of lessors, licensees, contractors, franchisees or similar requirements (andcustomers, in all caseseach case, letters of credit in respect thereof) 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 after incurrence;
(12) the incurrence by Foreign the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements for indemnification or purchase price adjustment obligations of the Company or a Restricted Subsidiary, in an aggregate principal amount at each case, incurred or assumed in connection with the acquisition or disposition of any time outstanding pursuant to this clause (12)business, assets or Capital Stock of a Restricted Subsidiary; provided that the maximum liability in respect of all such obligations shall not exceed the gross proceeds actually paid or received by the Company and any Restricted Subsidiary, including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater Fair Market Value of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionnon-cash proceeds;
(13) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness arising from agreements of to the Company extent the net proceeds thereof are promptly deposited to defease the Notes or such Restricted Subsidiary providing for indemnification, adjustment of purchase price satisfy and discharge this Indenture under Article 8 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition11 hereof;
(14) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness consisting arising in connection with endorsement of take-or-pay obligations contained in supply agreements entered into instruments for deposit in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityQualified Affiliate Debt; and
(16) the incurrence or issuance by the Company or any of its Restricted Subsidiaries of additional Indebtedness or Disqualified Stock or by any Restricted Subsidiary of additional Indebtedness or preferred stock in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 10.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1716) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrenceincurrence in any manner that complies with this Section 4.09, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09 and such item of Indebtedness (or portion thereof, as applicable) will be treated as having been incurred pursuant to only such clause or clauses or Section 4.09(a). Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment or accretion of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock preferred stock in the form of additional shares of the same class of Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock preferred stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 2 contracts
Sources: Indenture (M & F Worldwide Corp), Indenture (M & F Worldwide Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectlyincur any Indebtedness, 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 shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedPreferred Stock, howeverunless immediately after giving effect to the incurrence of such Indebtedness, that the Company may incur Indebtedness (including Acquired Debt) , or issue the issuance of such Disqualified Stock or Preferred Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma receipt and application of the net proceeds therefrom, including, without limitation, the application or use of the net proceeds therefrom andto repay Indebtedness or make any Restricted Payment, (i) the Consolidated Debt to Annualized Operating Cash Flow Ratio would be (A) less than 7.0 to 1.0, if prior to April 15, 2005 and (B) less than 6.0 to 1.0, if on or after April 15, 2005 or (ii) in the case of Acquired Debtany incurrence of Indebtedness prior to April 15, giving pro forma effect 2005 only, Consolidated Debt would be equal to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning less than 70% of such four-quarter periodTotal Invested Capital.
(b) So long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, paragraph (a) of this Section 4.11(a) 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries subsidiaries of the Existing Indebtedness;
(3ii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureNote Guarantees;
(4iii) the incurrence by the Company and any Guarantor of Indebtedness under Credit Facilities; provided that the aggregate principal amount of all Indebtedness of the Company and the Guarantors outstanding under the Credit Facilities at any time outstanding, after giving effect to such incurrence, does not exceed an amount equal to $250.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Subsidiaries since the date of this Indenture to permanently repay Indebtedness under the Credit Facilities pursuant to Section 4.10.
(iv) 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 leasing or financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of inventory, property, plant or equipment used or usable in a Permitted Business, its business in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at 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 extend, refund, refinancerefinance or replace, renewIndebtedness, defease or replace Indebtedness (other than intercompany Indebtedness) , that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause paragraph (2), (3), (4), (5), (16) or (17a) of this Section 4.11(b4.09 or clauses (i), (ii) or (xi) of this 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 Wholly-Owned Restricted SubsidiariesSubsidiaries that are 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 Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the GuaranteeNote Guarantee of such Guarantor, 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 the Company or a one of its Wholly-Owned Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its Wholly-Owned Restricted Subsidiary of the Company will Subsidiaries, 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in that are incurred for the ordinary course purpose of business and 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, provided that the notional amount of any such Hedging Obligation does not for speculative purposesexceed the amount of Indebtedness to which such Hedging Obligation relates;
(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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 Stock;
(x) the incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that by the Company or any of its Restricted Subsidiaries of Indebtedness (A) in respect of bid, performance or advance payment bonds, standby letters of credit and appeal or surety bonds entered into in the ordinary course of business and not in connection with the borrowing of money, or (B) 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 may incur in compliance with the terms of this Indenture;
(xi) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness (which may, but need not be, incurred in whole or in part under the Credit Facilities) in an aggregate principal amount, or Accreted Value, as applicable, at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xi), not to exceed $50.0 million; and
(xii) the incurrence by the Company of any Indebtedness under any unsecured deferred promissory note payable to Sprint PCS pursuant to the deferral of collected revenues provisions of the Consent and Agreement between Sprint PCS and the lenders under the Credit Facilities.
(c) For purposes of determining compliance with this Section 4.11 shall not 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (i) through (xii) of paragraph (b) of this Section 4.09, or is entitled to be incurred pursuant to the paragraph (a) of this Section 4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09; provided, that Indebtedness outstanding under the Credit Facilities on the date of this Indenture will be deemed to be exceeded solely as a result have been incurred on such date in reliance on the exception provided in clause (iii) of fluctuations in exchange rates or currency valuesparagraph (b) of this Section 4.09.
Appears in 1 contract
Sources: Indenture (Ubiquitel Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stockstock (including Disqualified Stock or preferred stock existing at the time of acquisition of a Guarantor), 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 in accordance with Section 4.21 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 2.0 no greater than 6.5 to 11 for any four fiscal quarter period ending on or prior to December 31, 2005; no greater than 6.0 to 1 for any four fiscal quarter period ending after December 31, 2005 and on or prior to December 31, 2006; no greater than 5.5 to 1 for any four fiscal quarter period ending after December 31, 2006 and on or prior to December 31, 2007; and no greater than 5.0 to 1 for any four fiscal quarter period ending after December 31, 2007, in each case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 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) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionExisting Indebtedness;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstanding;
(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 extend, refund, refinance, renewreplace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness), Disqualified Stock or preferred stock of a Restricted Subsidiary of the Company, in each case that was permitted by this Supplemental Indenture to be incurred or issued under Section 4.11(a4.09(a) or clause clauses (21), (3), (4), (5), (162) or (173) of this Section 4.11(b4.09(b);
(64) 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 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 Subsidiary 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 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 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 (64);
(75) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock or preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock or 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 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 issuance of such Disqualified Stock or preferred stock by the Company or such Restricted Subsidiary Subsidiary, as the case may be, that was not permitted by this clause (75);
(8) 6) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(97) 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 that was permitted to be incurred by another provision of this Section 4.11covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee shall be subordinated in right of payment to the same extent as the Indebtedness guaranteed;
(10) 8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appealperformance bonds, completion bonds, bid completionbonds, guarantee appeal bonds and surety bonds; bonds or other similar requirements (andbonds or obligations, in all cases, letters of credit in respect thereof) each case incurred in the ordinary course of business, and any Guarantees or letters of credit functioning as or supporting any of the foregoing;
(119) 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;
(1210) the incurrence by Foreign Subsidiaries the Company or any of the Guarantors of Indebtedness represented by Capital Lease Obligations (whether or not as part of a Sale and Leaseback Transaction), mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of acquisition, construction or improvement of property, plant or equipment, in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 10.0 million;
(1311) the incurrence by the Company or a Restricted Subsidiary Indebtedness consisting of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for customary indemnification, adjustment adjustments of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition acquisition 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPermitted Business; and
(1612) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 5.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor Guarantor, unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Subsidiary Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining any particular amount of Indebtedness under this Section 4.09, Guarantees, Liens or obligations with respect to letters of credit, in each case supporting Indebtedness otherwise included in the determination of such particular amount, shall not be included. For purposes of determining compliance with this Section 4.114.09, 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 (1712) of Section 4.11(b4.09(b), or is entitled to be incurred pursuant to Section 4.11(a4.09(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. 4.09, and such item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have treated as having been incurred on pursuant to only one of such date in reliance on the exception provided by clause (1clauses of Section 4.09(b) of the definition of Permitted Debtor pursuant to Section 4.09(a). 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 or series of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued4.09. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the maximum fixed redemption or repurchase price of Disqualified Stock, exclusive of accrued dividends thereon, of the specified Person at the time of determination and, with respect to any Restricted Subsidiary that is not a Guarantor, any preferred stock;
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person; and
(4) the principal amount of the Indebtedness, in the case of any other Indebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee guaranty or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Company will Issuer and the Restricted Subsidiaries shall not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any or shares of preferred stock; provided, however, that the Company Issuer and its Restricted Subsidiaries may incur Indebtedness (including Acquired DebtDebt and Indebtedness under the New Credit Facility) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.if:
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% no Default or Event of Consolidated Net Tangible Assets Default shall have occurred and be continuing at the time of or after giving effect to such incurrence;
(ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Subordinated Indebtedness by the Company or such Restricted SubsidiaryIssuer, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a the pro forma application of the net proceeds therefrom) as if such Acquired Debt), Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least Consolidated Interest Coverage Ratio is greater than 2.0 to 1 or 1.0; provided, that so long as any Indebtedness incurred pursuant to clause (yiii) equal to or greater than it would have been immediately preceding of this Section 4.09 shall remain outstanding, such incurrence or (ii) the Consolidated Net Worth of the Company would Interest Coverage Ratio shall be greater than 2.5 to 1.0 after giving effect to such incurrence (including the Consolidated Net Worth pro forma application of the Company immediately prior net proceeds thereof); and
(iii) in the case of the incurrence of any Indebtedness other than Subordinated Indebtedness by the Issuer or the incurrence of any Indebtedness by a Restricted Subsidiary, after giving effect to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness incurrence (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness the pro forma application of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(anet proceeds thereof), the Company will be permitted Consolidated Interest Coverage Ratio is greater than 2.5 to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, createincur any Indebtedness, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), other than Permitted Indebtedness, 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 preferred stock; providedPreferred Capital Stock, however, that in each case unless immediately after giving effect to the Company may incur incurrence of such Indebtedness (including Acquired Debt) or issue the issuance of such Disqualified Stock or Preferred Capital Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma receipt and application of the net proceeds therefrom, including, without limitation, the application or use of the net proceeds therefrom andto repay Indebtedness or make any Restricted Payment, (i) the Consolidated Debt to Annualized Operating Cash Flow Ratio would be (A) less than 7.0 to 1.0, if prior to December 31, 2005 and (B) less than 6.0 to 1.0, if on or after December 31, 2005 or (ii) in the case of Acquired Debtany incurrence of Indebtedness prior to December 31, giving pro forma effect 2005 only, Consolidated Debt would be equal to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning less than 75% of such four-quarter periodTotal Invested Capital.
(b) So long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, paragraph (a) of this Section 4.11(a) 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Existing Indebtedness;
(ii) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indentureon the Issue Date;
(4iii) the incurrence by the Company and any Guarantor of Indebtedness under Credit Facilities; provided that the aggregate principal amount of all Indebtedness of the Company and the Guarantors outstanding under the Credit Facilities at any time outstanding, after giving effect to such incurrence, does not exceed the sum of (A) $200.0 million plus (B) 75% of Qualified Receivables, which sum shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied since the date of this Indenture to repay Indebtedness under a Credit Facility pursuant to Section 4.10;
(iv) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings Obligations or purchase money obligationsPurchase Money Indebtedness, in each case, (A) incurred for the purpose of leasing or financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of inventory, property, plant or equipment used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, including telephone and computer systems and operating facilities, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at any time outstandingoutstanding and (B) such Indebtedness shall not constitute more than 100% (determined in accordance with GAAP in good faith by the Board of Directors of the Company) of the cost of the property so purchased, constructed, improved or leased;
(5v) 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 extend, refund, refinancerefinance or replace, renewIndebtedness, defease or replace Indebtedness (other than intercompany Indebtedness) , that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause paragraph (2), (3), (4), (5), (16) or (17a) of this Section 4.11(b4.09 or clauses (i), (ii) or (xiii) of this 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 SubsidiariesSubsidiaries that are 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 Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the GuaranteeNote Guarantee of such Guarantor, 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 the Company or a one of its Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its Restricted Subsidiary of the Company will Subsidiaries, 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposesfixing 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 Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 Stock;
(x) Indebtedness (A) in respect of Indebtedness performance, surety or an issuance appeal bonds or bankers' acceptances provided in the ordinary course of Disqualified Stock business and (B) arising from agreements providing for purposes indemnification, adjustment of this Section 4.11; providedpurchase price or similar obligations, in each such caseor from guarantees or letters of credit, that the amount thereof is included in Fixed Charges surety bonds or performance bonds securing any obligations of the Company as accrued. Notwithstanding or any of is Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of any business, assets or Restricted Subsidiary (other provision of this Section 4.11, the maximum amount than guarantees of Indebtedness that incurred by a Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition), in a principal amount not to exceed the gross proceeds actually received by the Company or any Restricted Subsidiary may incur in connection with such disposition;
(xi) the incurrence by the Company or any Restricted Subsidiary of any Indebtedness under any unsecured deferred promissory note payable to Sprint PCS pursuant to the deferral of collected revenues provisions of the Consent and Agreement between Sprint PCS and the lenders under the Credit Facilities;
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount, or accreted value, as applicable, at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 4.11 shall clause (xii), not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.exceed $50.0 million; and
Appears in 1 contract
Sources: Indenture (Ipcs Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), the Company will not, and will not permit any of its Restricted Subsidiaries to, 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 other shares of preferred stockPreferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue preferred stockDisqualified Stock or other shares of Preferred Stock, if (i) in the case of the incurrence of Indebtedness or issuance of Disqualified Stock by the Company or any Restricted Subsidiary of the Company, as of the date of such incurrence or issuance and after giving effect thereto and to the application of proceeds therefrom, the Company’s Debt to Assets Ratio would not exceed 0.8 to 1.0, (ii) in the case of the incurrence of Indebtedness or issuance of Disqualified Stock by Venoco or any Restricted Subsidiary of Venoco, in addition to compliance with clause (i) above, as of the date of such incurrence or issuance and after giving effect thereto and to the application of proceeds therefrom, Venoco’s Debt to Assets Ratio would not exceed 0.6 to 1.0, and (iii) in the case of the issuance of shares of Preferred Stock (other than Disqualified Stock) by any Restricted Subsidiary of the Company, the Company’s Fixed Charge Coverage Ratio for the Company’s its most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such shares of Preferred Stock are issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) ), as if such Acquired Debt, Acquired the shares of Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (DENVER PARENT Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall 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 Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or 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 4.11(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed under the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) New Credit Agreement and the incurrence by the Company and its Restricted Subsidiaries Subsidiary Guarantors of Guarantees thereof; PROVIDED that the Existing aggregate principal amount of all Indebtedness outstanding under the New Credit Agreement after giving effect to such incurrence does not exceed $45,000,000 less the aggregate amount of all Net Proceeds of Asset Sales applied to permanently repay any such Indebtedness or, in the case of any such revolving Indebtedness, permanently reduce commitments therefor pursuant to Section 4.07 above;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4ii) 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, Hedging Obligations that are incurred for the purpose of financing all 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 that are incurred by the Company or any part of its Subsidiaries to protect against currency exchange rate risk in the purchase price or cost conduct of design, construction, installation or improvement its operations;
(iii) the incurrence by the Foreign Subsidiaries of property, plant or equipment used or usable in a Permitted Business, Indebtedness in an aggregate principal amountamount that, including all Permitted Refinancing when combined with Existing Indebtedness incurred to refund, refinance or replace any of such Foreign Subsidiaries (other than Indebtedness incurred pursuant to this described in clause (4iv) below), does not to exceed $6,500,000 and the greater incurrence by the Company of (i) 1.0% Guarantees of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingsuch Indebtedness;
(5iv) the incurrence by the Foreign Subsidiaries of Indebtedness in connection with the issuance of completion bonds, performance guaranties or letters of credit, and the incurrence by the Company of Guarantees thereof (with such bonds, guaranties or letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Foreign Subsidiaries thereunder) in an aggregate amount that, when combined with such Existing Indebtedness of such Foreign Subsidiaries (other than Indebtedness described in clause (iii) above), does not exceed $4,000,000;
(v) the incurrence by the Company and its Subsidiaries of the Existing Indebtedness;
(vi) the incurrence by the Company of Indebtedness represented by the Notes and the incurrence by the Subsidiary Guarantors of Indebtedness represented by the Subsidiary Guarantees;
(vii) 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, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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; providedPROVIDED, howeverHOWEVER, that:
that (Ai) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of Notes and if a Subsidiary Guarantor; and
Guarantor is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Subsidiary Guarantees 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 Wholly Owned 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10ix) the incurrence by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness in respect of workers’ compensation claims; self-insurance represented by Capital Lease Obligations, mortgage financings or similar purchase money obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in each case incurred for the purpose of financing all cases, letters or any part of credit in respect thereof) the purchase price or cost of construction or improvements of property used in the ordinary course business of business;the Company or such Subsidiary Guarantors, in an aggregate principal amount not to exceed $5,000,000 at any time outstanding; and
(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 funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any other Indebtedness incurred pursuant to this clause (16x), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) 15,000,000. For purposes of determining compliance with this Section 4.11covenant, 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 (17x) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)the first paragraph of this covenant, the Company will be permitted to shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. covenant and such item of Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially shall 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 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Any Indebtedness that the Company or any Restricted Subsidiary may incur be incurred pursuant to this Section 4.11 shall not covenant may be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesincurred under the New Credit Agreement.
Appears in 1 contract
Sources: Indenture (Wavetek U S Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall not nor will it permit any of its Restricted Subsidiaries toSubsidiaries, 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 Debt. b) any Indebtedness (including Acquired DebtNotwithstanding the provisions of Section 4.19(a), 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 Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto)extent provided below, as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case any Subsidiary may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of Incur the following items of Indebtedness (collectively, “Permitted Debt”):
): (1) the incurrence by Debt (which may include letters of credit) of the Company or any Restricted Subsidiary Guarantor constituting First-Out Obligations Incurred pursuant to the Revolving Credit Agreement for which the Authorized Representative of Indebtedness such Debt holders has executed a joinder to the Collateral Trust Agreement as provided therein and letters of credit under one or more Credit Facilities Permitted Refinancing Debt with respect thereto in an aggregate principal amount outstanding at any one time outstanding under this clause (1) (with letters the date of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) Incurrence not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 20.5 million;
; (2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness Debt between or among the Company and any of its Restricted Subsidiaries; provided, however, that:
: (A) if the Company or any Subsidiary Guarantor is the an obligor on such Indebtedness Debt and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness Debt 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, in each case pursuant to the Intercompany Subordination Agreement; and
and (B) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness Debt 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 Debt 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 Debt by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause Section 4.19(b)(2); (6);
(73) the issuance by any unsecured Debt of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any Subsidiary Guarantor (including without limitation Disqualified Equity Interests of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business such Person) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu Permitted Refinancing Debt with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness thereto in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), on the date of incurrence not to exceed the greater of $5.0 million; provided that such Debt has a Stated Maturity after the Stated Maturity of the Notes; (i4) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements Debt of the Company or such Restricted Subsidiary providing for indemnification, adjustment Debt 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
pursuant to (14a) the incurrence by Notes issued on the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
Issue Date, (15b) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness Additional New Senior Secured Notes in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance2,073,143, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated PIK Notes issued in right payment of payment to any other Pari Passu Indebtedness of interest accrued on the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment Notes during the First Interest Period pursuant to the Notes and the applicable Guarantee on substantially identical terms; providedterms hereof, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes additional New Senior Secured Notes issued as payment in kind of determining compliance with this Section 4.11interest accrued on the New Senior Secured Notes during the interest period thereunder ending February 15, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b)2026, or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same termsterms thereof, and the payment (e) Debt 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.Subsidiary
Appears in 1 contract
Sources: Indenture (INNOVATE Corp.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, createincur any Indebtedness, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), other than Permitted Indebtedness, 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 preferred stock; providedPreferred Capital Stock, however, that in each case unless immediately after giving effect to the Company may incur incurrence of such Indebtedness (including Acquired Debt) or issue the issuance of such Disqualified Stock or Preferred Capital Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma receipt and application of the net proceeds therefrom, including, without limitation, the application or use of the net proceeds therefrom andto repay Indebtedness or make any Restricted Payment, (i) the Consolidated Debt to Annualized Operating Cash Flow Ratio would be (A) less than 7.0 to 1.0, if prior to December 31, 2005 and (B) less than 6.0 to 1.0, if on or after December 31, 2005 or (ii) in the case of Acquired Debtany incurrence of Indebtedness prior to December 31, giving pro forma effect 2005 only, Consolidated Debt would be equal to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning less than 75% of such four-quarter periodTotal Invested Capital.
(b) So long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, paragraph (a) of this Section 4.11(a) will 4.9 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”Indebtedness"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indentureon the Issue Date;
(4ii) the incurrence by the Company and any Guarantor of Indebtedness under Credit Facilities; provided that the aggregate principal amount of all Indebtedness of the Company and the Guarantors outstanding under all Credit Facilities at any time outstanding, after giving effect to such incurrence, does not exceed the sum of (A) $330.0 million less any amounts outstanding under paragraph (iii) below, plus (B) 80% of Qualified Receivables, which sum shall be permanently reduced by the aggregate amount of all Net Proceeds of Asset Sales applied since the Issue Date to repay Indebtedness under a Credit Facility pursuant to Section 4.10;
(iii) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings Obligations or purchase money obligationsPurchase Money Indebtedness, in each case, (A) incurred for the purpose of leasing or financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of inventory, property, plant or equipment used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, including telephone and computer systems and operating facilities, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at any time outstandingoutstanding and (B) such Indebtedness shall not constitute more than 100% (determined in accordance with GAAP in good faith by the Board of Directors) to the Company or such Restricted Subsidiary, as applicable, of the cost of the property so purchased, constructed, improved or leased;
(5iv) 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 extend, refund, refinancerefinance or replace, renewIndebtedness, defease or replace Indebtedness (other than intercompany Indebtedness) , that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause paragraph (2), (3), (4), (5), (16) or (17a) of this Section 4.11(b)4.9 or clause (i) of this paragraph;
(6v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly-Owned Restricted SubsidiariesSubsidiaries that are 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 Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the GuaranteeNote Guarantee of such Guarantor, 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 the Company or a one of its Wholly-Owned Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its Wholly-Owned Restricted Subsidiary of the Company will Subsidiaries, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Wholly-Owned Restricted Subsidiary, as the case may be, that was not permitted by this clause (6v);
(7vi) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposesfixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(9vii) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.9;
(10viii) the incurrence by accrual of interest and the Company or any payment of its Restricted Subsidiaries dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock;
(ix) Indebtedness (A) in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) appeal bonds or bankers' acceptances provided in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets business and (iiB) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in each case, any case incurred in connection with the disposition of any business, assets or subsidiary, Restricted Subsidiary (other than guarantees Guarantees of Indebtedness incurred by any a Person acquiring all or any portion of such business, assets or subsidiary Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability ), in respect of all such Indebtedness shall at no time a principal amount not to exceed the gross proceeds actually received by the Company or such any Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16x) the incurrence by the Company or any Restricted Subsidiary of its any Indebtedness under any unsecured deferred promissory note payable to Sprint PCS pursuant to the deferral of collected revenues provisions of the Consent and Agreement between Sprint PCS and the lenders under the Credit Facilities;
(xi) the incurrence by the Company or any Restricted Subsidiaries Subsidiary of additional Indebtedness in an aggregate principal amount (amount, or accreted value, as applicable) , at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (16xi), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17xii) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary Guarantor of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided but only to the extent that immediately after giving effect to such the incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such Indebtedness (A) in the event of any incurrence of Acquired Debt on or issuanceafter December 31, determined on a pro forma basis (including a pro forma application of 2005 only, the net proceeds therefrom) Consolidated Debt to Annualized Operating Cash Flow Ratio would decrease as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at compared to the beginning of such four-quarter period, would be (x) at least 2.0 Consolidated Debt to 1 or (y) equal Annualized Operating Cash Flow Ratio immediately prior to or greater than it would have been immediately preceding such incurrence or (iiB) in the event of any incurrence of Acquired Debt prior to December 31, 2005 only, the ratio of Consolidated Net Worth Debt to Total Invested Capital would decrease as compared to the ratio of the Company would be greater than the Consolidated Net Worth of the Company Debt to Total Invested Capital immediately prior to such transactionincurrence.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.114.9, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1i) through (17xii) of paragraph (b) of this Section 4.11(b)4.9, or is entitled to be incurred pursuant to paragraph (a) of this Section 4.11(a)4.9, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.9 and such item of Indebtedness shall be treated as having been incurred pursuant to only one of such clauses or pursuant to Section 4.9(a) at any given time. Indebtedness outstanding under any Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially Issue Date shall be deemed to have been incurred on such date in reliance on the exception provided by under clause (1ii) of the definition paragraph (b) of Permitted Debtthis Section 4.9. The accrual Accrual of interest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the 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 4.11; provided4.9.
(d) Notwithstanding anything to the contrary contained in this Section 4.9, in each such case, that the amount thereof is included in Fixed Charges of (i) the Company as accrued. Notwithstanding shall not, and shall not permit any other provision of Guarantor to, incur any Indebtedness pursuant to this Section 4.114.9 if the proceeds thereof are used, directly or indirectly, to refinance any subordinated Indebtedness unless such newly-incurred Indebtedness shall be subordinated to the maximum amount Notes or the applicable Note Guarantee, as the case may be, to at least the same extent as such refinanced subordinated Indebtedness, and (ii) the Company shall not permit any Restricted Subsidiary that is not a Guarantor to incur any Indebtedness pursuant to this Section 4.9 if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesGuarantor.
Appears in 1 contract
Sources: Indenture (Horizon PCS Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly Directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") or permit any Affiliate which is a Restricted Subsidiary to incur any Indebtedness (including Acquired Debt), ) and the Company will not issue any Disqualified Stock and that UNICCO will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; stock (other than to UNICCO or to another Restricted Subsidiary) provided, however, that the Company Companies and their Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Companies and their Restricted Subsidiaries may incur Indebtedness or issue preferred stock, stock if the Fixed Charge Coverage Ratio for the Company’s UNICCO's most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) ), as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock the additional Indebtedness had been incurred or the preferred stock had been issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or .
(ii) The provisions of Section 4.02.(b)(i) will not apply to the Consolidated Net Worth incurrence of any of the Company would be following (collectively, "Permitted Debt"):
(A) the incurrence by the Companies or their Restricted Subsidiaries of Indebtedness under the Credit Facility; in an aggregate amount not to exceed at any time outstanding the greater than of (a) $45.0 million, less the Consolidated aggregate amount of all Net Worth Proceeds of Asset Sales applied to repay any such Indebtedness (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings), and (b) 60% of the Company immediately prior to such transaction.Companies' and their Restricted Subsidiaries' accounts receivable (net of reserves), as shown on the Companies' most recent consolidated balance sheets;
(cB) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any the incurrence by UNICCO of Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of represented by the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Senior Subordinated Notes and the applicable 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 Senior Subordinated Note Indenture;
(C) the incurrence by the Companies of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Existing Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.;
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and the Company will shall not issue any Disqualified Stock and will shall not permit any of its their Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that stock unless the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 not greater than 8.75 to 1, 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will the most recently ended fiscal quarter. So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this covenant shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or any and its Restricted Subsidiary Subsidiaries of Indebtedness and letters of credit under one or more the Credit Facilities in an Facilities; provided that 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 all Indebtedness of the Company and its Restricted Subsidiaries thereunder) outstanding under all Credit Facilities after giving effect to such incurrence does not exceed an amount equal to exceed $3.5 billion less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets Asset Sales applied by the Company or (ii) $600.0 millionany of its Subsidiaries in the case of an Asset Sale since the Existing Notes Issue Date to repay Indebtedness under a Credit Facility pursuant to Section 4.11;
(2) the incurrence by the Company and its Restricted Subsidiaries of Existing 69 Indebtedness (other than the Existing IndebtednessCredit Facilities);
(3) the incurrence on the Issue Date by the Company and the Subsidiary Guarantors its Restricted Subsidiaries of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureOther Notes;
(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 construction or improvement (including, without limitation, the cost of design, development, construction, installation acquisition, transportation, installation, improvement, and migration) of Productive Assets of the Company or improvement any of property, plant or equipment used or usable in a Permitted Businessits Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 75 million at 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 extend, refund, refinancerefinance or replace, renewin whole or in part, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph of this covenant or clause clauses (2), (3), (4), (5), (16) or (173) of this Section 4.11(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 Wholly Owned Restricted Subsidiaries; provided, however, provided that:
(Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the 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 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 any of its Restricted Subsidiary, as the case may be, Subsidiaries that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposes;
fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indentures to be outstanding; 70 (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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.10;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Charter Communications Holdings Capital Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Parent Guarantor will not, and shall will not cause or 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 Parent Guarantor will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or any Issuer, the Dutch Guarantor and its Restricted Subsidiary Subsidiaries of Indebtedness and letters consisting of credit under one or more Credit Facilities in (A) an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder1)(A) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company €140.0 million that may be secured on a senior priority basis; and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Other Pari Passu Lien Obligations 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness Additional Notes in an aggregate principal amount at any time not to exceed an amount equal to the amount of Second Lien Obligations outstanding pursuant to this clause on the Restructuring Effective Date plus €7.5 million and, in each case of (12A) and (B), including all any Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause in respect thereof (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements but only if an authorized representative of the Company or such Restricted Subsidiary providing for indemnification, adjustment holders 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 shall at no time exceed be a party to or, if applicable, shall have executed a deed of accession or similar agreement with respect to, the gross proceeds actually received by the Company Intercreditor Agreement or such Restricted Subsidiary an Additional Intercreditor Agreement, and all incurrences, repayments and other transactions in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained are in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection compliance with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstandingIntercreditor Agreement, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause Clauses 6.1 (16Restriction on Payment and cancellation: Second Lien Liabilities), 6.2 (Permitted Payments and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior cancellation: Second Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(bLiabilities), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.,
Appears in 1 contract
Sources: Indenture
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not ) or issue any shares of Disqualified Stock and will not permit any of its Restricted Subsidiaries to incur Indebtedness or issue any shares of preferred stock; provided, however, that that, so long as no Default or Event of Default has occurred and is continuing, the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, issued at the beginning of such four-quarter period.
(b) Section 4.11(a) will . The provisions of the first paragraph of this covenant shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary and the Guarantors 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) not to exceed $195.0 million (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries the Guarantors thereunder) not ), less the aggregate amount of all Net Proceeds of Asset Sales applied to exceed the greater of repay any such Indebtedness pursuant to clause (i) 30.0% of Consolidated Net Tangible Assets or the second paragraph of Section 4.10 hereof;
(ii) $600.0 millionthe incurrence by the Company and the Guarantors of Indebtedness represented by the Notes, the Exchange Notes and any Subsidiary Guarantees;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstanding;
(5iv) 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, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under by the first paragraph of this Section 4.11(a) 4.09, or clause by clauses (2ii), (3iii), (4iv), (5vi), (16vii), (viii), (ix), (x) or and (17xii) of this Section 4.11(b)4.09;
(6v) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted Subsidiaries; provided, however, that:
that (Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; and
Notes and (B) (ib) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company Subsidiary, 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 Subsidiary, 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);
(7vi) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposesfixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(9vii) the incurrence by any of the Company's Restricted Subsidiaries of Indebtedness or Preferred Stock incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company(other than Indebtedness or preferred stock 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 Restricted Subsidiary became a Restricted Subsidiary or was acquired by the Company); provided that the principal amount (or accreted value, as applicable) or aggregate liquidation preference, as applicable, of such Indebtedness or Preferred Stock, as the case may be, together with any other outstanding Indebtedness and Preferred Stock incurred pursuant to this clause (vii) does not exceed $5.0 million;
(viii) the incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations) financing 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), in each case, incurred no more than 180 days after such purchase, lease or improvement of such property in respect of such Indebtedness; provided, however, at the time of the incurrence of such Indebtedness and after giving effect thereto, the aggregate principal amount of all Indebtedness incurred pursuant to this clause (viii) and then outstanding shall not exceed the greater of $10.0 million and 10% of Adjusted Consolidated Assets;
(ix) the incurrence by the Company of Indebtedness in connection with the acquisition of a Permitted Business in respect of such Indebtedness; provided, however, that the aggregate amount of Indebtedness incurred pursuant to this clause (ix) and then outstanding shall not exceed $20.0 million;
(x) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedcovenant;
(10xi) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xi); and
(xii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time which, together with all other Indebtedness of the Company outstanding on the date of such incurrence (other than Indebtedness permitted by clauses (i) through (xi) above or the first paragraph of this covenant) does not exceed $30.0 million; provided that the aggregate principal amount of Indebtedness incurred by Restricted Subsidiaries of the Company pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (ixii) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company then outstanding shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.exceed $2.0
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Parent Entity and the Company shall not, and shall not permit any of its Restricted their 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 shall not issue any Disqualified Stock and will shall not permit the Parent Entity to issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Company's Subsidiary Guarantors may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Leverage Ratio for of Paperweight Development Corp. at the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application time of the net proceeds therefrom and, in the case incurrence of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional such Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or issuance of such Disqualified Stock had been issuedor such preferred stock, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving pro forma effect to such incurrence or issuance, issuance as of such date and to the case may be, (i) use of proceeds therefrom as if the Fixed Charge Coverage Ratio for same had occurred at the Company’s beginning of the most recently ended four full fiscal quarters quarter period of Paperweight Development Corp. for which internal financial statements are available in accordance with Section 1.13 preceding the date of available, would have been no greater than:
(a) 3.25 to 1, if such incurrence or issuanceissuance is on or prior to September 30, determined on a pro forma basis 2002;
(including a pro forma application of the net proceeds therefromb) as 2.50 to 1, if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately issuance is after September 30, 2002 but on or prior to such transaction.September 30, 2003;
(c) The Company shall not incur2.25 to 1, and shall not permit any Subsidiary Guarantor if such incurrence or issuance is after September 30, 2003 but on or prior to incurSeptember 30, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms2004; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.or
Appears in 1 contract
Sources: Indenture (Appleton Papers Inc/Wi)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock (other than Permitted Debt); provided, however, that the Company and/or the Guarantors may incur additional Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The Company will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness of the Company will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Barneys New York Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company Company's Restricted Subsidiaries will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock (other than to the Company or a Wholly Owned Restricted Subsidiary of the Company); provided, however, that the Company and the Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Consolidated Interest Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The provisions of the first paragraph of this covenant will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary and the Guarantors of Indebtedness under (a) the New Credit Facility and letters (b) Capital Lease Obligations and purchase money financing in respect of credit under one or more Credit Facilities in an property, plant and equipment, provided that the aggregate principal amount at any one time outstanding under of Indebtedness incurred 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 Subsidiaries thereunder) shall not to exceed at any time outstanding the greater of (i1) 30.0$230.0 million and (2) the sum of (A) 80% of Consolidated Net Tangible Assets or the consolidated accounts receivable of the Company as shown on the Company's most recent balance sheet, plus (B) 60% of the consolidated inventory of the Company as shown on the Company's most recent balance sheet, plus (C) 50% of the consolidated property, plant and equipment, net of depreciation, of the Company as shown on the Company's most recent balance sheet;
(ii) $600.0 millionthe incurrence by the Company and the Guarantors of Indebtedness represented by the Notes, the Subsidiary Guarantees and this Indenture;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Company and the Subsidiary Guarantors of additional Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition acquisition 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 acquisitiona new Restricted 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 or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.was incurred
Appears in 1 contract
Sources: Indenture (Allied Holdings Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) incur any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock Stock, and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (1) the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or and (b) the Company may issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, if if, in each case, the Fixed Charge Charged Coverage Ratio for the Company’s 's most recently ended fiscal four full fiscal quarters for which the Company has filed financial statements are available in accordance with Section 4.21 the Commission preceding the date on which such Indebtedness is incurred or such Disqualified Stock is issued, as the case may be, would have been at least 2.0 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(aIn addition to the foregoing, the Company and any Restricted Subsidiary (except as specified below) will not prohibit the incurrence of any of may incur the following items types of Indebtedness (collectively, “Permitted Debt”):Indebtedness:
(1i) the incurrence by the Company or any Restricted Subsidiary Guarantor 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 Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence guarantees thereof by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical termsGuarantors; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.the
Appears in 1 contract
Sources: Indenture (Grant Prideco Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockIndebtedness; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur will be entitled to Incur Indebtedness or issue preferred stockif, if on the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined date of such Incurrence and after giving effect thereto on a pro forma basis (including a pro forma application basis, the Consolidated Coverage Ratio exceeds 2.0 to 1.0; provided, that the amount of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect Indebtedness that may be incurred pursuant to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, foregoing by Restricted Subsidiaries that are not Guarantors shall not exceed $5.0 million at the beginning of such four-quarter periodany one time outstanding.
(b) Notwithstanding Section 4.11(a) 4.09(a), the Company and its Restricted Subsidiaries will not prohibit the incurrence of be entitled to Incur any or all of the following items of Indebtedness (collectively, “Permitted Debt”):Indebtedness:
(1) the incurrence Indebtedness Incurred by the Company or any Restricted Subsidiary under the ABL Credit Facility and the issuance and creation 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) 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 and its Subsidiaries thereunderface amount thereof) in an aggregate amount not to exceed the greater of (iA) 30.0% of Consolidated Net Tangible Assets $25.0 million or (iiB) $600.0 millionthe Borrowing Base as of any date of Incurrence;
(2) the incurrence by the Company Indebtedness owed to and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence held by the Company or a Restricted Subsidiary; provided, however, that (A) any subsequent issuance or transfer of its any Capital Stock which results in any such Restricted Subsidiaries Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of such Indebtedness represented by Capital Lease Obligations, mortgage financings (other than to the Company or purchase money obligationsa Restricted Subsidiary) shall be deemed, in each case, incurred for to constitute the purpose Incurrence of financing all or any part of such Indebtedness by the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets obligor thereon and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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:
(AB) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be is expressly subordinated to the prior payment in full in cash of all Obligations then due obligations with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; Notes 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (PRETIUM CANADA Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1i) Indebtedness under the incurrence by the Company 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 not to exceed the greater of $4,500.0 million and 8.6% of Total Tangible Assets of the Company, (ii) Indebtedness under this clause (1) (with letters of credit being deemed to have a the EIB Facility in an aggregate principal amount equal at any time outstanding not to exceed the maximum potential liability greater of €203.4 million and 0.6% of Total Tangible Assets of the Company and its Subsidiaries thereunderCompany, (iii) Indebtedness under the Existing Revolving Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (ix) 30.0the sum of $1,700.0 million, €1,000.0 million and £300.0 million and (y) 7.3% of Consolidated Net Total Tangible Assets or of the Company, (iiiv) Indebtedness under the Existing First-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of $600.0 million2,188.0 million and 4.2% of Total Tangible Assets of the Company, (v) Indebtedness under the Existing Term Loan Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $1,860.0 million and €800.0 million and (y) 6.3% of Total Tangible Assets of the Company, (vi) Indebtedness under the 2026 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $775.0 million and €425.0 million and (y) 2.6% of Total Tangible Assets of the Company and (vii) Indebtedness under the 2027 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of $900.0 million and 1.7% of Total Tangible Assets of the Company;
(2) the incurrence by the Company and its Restricted Subsidiaries of (i) Existing Indebtedness (other than Indebtedness under the Convertible Notes, the EIB Facility, the Existing IndebtednessRevolving Facility, the Existing Term Loan Facility, the Existing First-Priority Secured Notes, the Existing Second-Priority Secured Notes, the 2026 Unsecured Notes and the 2027 Unsecured Notes), (ii) Indebtedness under the 2026 Unsecured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $1,450.0 million and €500.0 million and (y) 4.0% of Total Tangible Assets of the Company, (iii) Indebtedness under the 2027 Unsecured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of $3,500.0 million and 6.7% of Total Tangible Assets of the Company and (iv) Indebtedness represented by the Convertible Notes and the related Guarantees;
(3) the incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Guarantees to be issued pursuant to this Supplemental IndentureNote Guarantees;
(4) 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, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price price, lease expense, rental payments or cost of design, construction, installation installation, repair, replacement or improvement of propertyproperty (including Vessels), plant or equipment or other assets (including Capital Stock) used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount or liquidation preference, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock or preferred stock issued pursuant to this clause (4), not to exceed the greater of $600.0 million and 1.5% of Total Tangible Assets at any time outstanding (it being understood that any such Indebtedness may be incurred and such Disqualified Stock and preferred stock may be issued after the acquisition, purchase, charter, leasing or rental or the design, construction, installation, repair, replacement or the making of any improvement with respect to any asset (including Vessels)); provided that any such property (including Vessels), plant or equipment or other assets do not constitute Collateral; provided further that the principal amount of any Indebtedness, Disqualified Stock or preferred stock permitted under this clause (4) did not in each case at the time of incurrence exceed, together with amounts previously incurred and outstanding under this clause (4) with respect to any applicable Vessel, (i) 1.0% in the case of Consolidated Net Tangible Assets a completed Vessel, the book value and (ii) $20.0 million at in the case of an uncompleted Vessel, 80% of the contract price for the acquisition or construction of such Vessel, in the case of this clause (ii), as determined on the date on which the agreement for acquisition or construction of such Vessel was entered into by the Company or its Restricted Subsidiary, plus any time outstandingother Ready for Sea Cost of such Vessel plus 100% of any related export credit insurance premium;
(5) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, the issuance by the Company or any Restricted Subsidiaries Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock in connection with any New Vessel Financing in 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 or Disqualified Stock or preferred stock issued under this clause (5)) not exceeding the New Vessel Aggregate Secured Debt Cap as calculated on the date of the relevant incurrence under this clause (5);
(6) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge, any Indebtedness (other than intercompany Indebtedness, Disqualified Stock or preferred stock) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.06(a) or clause (1), (2), (3), (4), (5), (166), (12) or (1718) of this Section 4.11(b4.06(b);
(67) 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:
(A) if the Company Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuer or a Subsidiary 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 or 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 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 Subsidiary, 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 (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries Subsidiary to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock or preferred stock; provided, however, that:
provided that (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
and (Bii) any sale or other transfer of any such Disqualified Stock or preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(910) the guarantee Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a any Restricted Subsidiary of to the Company extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.114.06; provided that that, in each case, if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or a Note Guarantee, then the guarantee shall 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) 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 and bankers’ acceptances in the ordinary course of business; (ii) in respect of letters of credit, surety, bid, performance, travel 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 past practice or industry practice (including as required by any governmental authority) and not in connection with the borrowing of money, including letters of credit or similar instruments in respect of self-insurance and workers compensation obligations, or for the protection of customer deposits or credit card payments; provided, however, that upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; (iii) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
30 days; and (12iv) consisting of (x) the incurrence by Foreign Subsidiaries financing of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause insurance premiums or (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (iy) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into agreements, in each case, in the ordinary course of business;
(1512) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted valueIndebtedness, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional or preferred stock, not to exceed the greater of stock (i) 5.0% of Consolidated Net Tangible Assets any Person outstanding on the date on which such Person becomes a Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and (iiassumption of related liabilities) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary or (ii) incurred or issued to provide all or any portion of Acquired Debtthe 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, Acquired Preferred however, with respect to this clause (12), that at the time of the acquisition or other transaction pursuant to which such Indebtedness, Disqualified Stock or Acquired Disqualified Stock; provided that immediately preferred stock was deemed to be incurred or issued, (x) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.06(a) after giving pro forma effect to the relevant acquisition or other transaction and the incurrence of such incurrence Indebtedness or issuance, as the case may be, issuance of such Disqualified Stock or preferred stock pursuant to this clause (i12) or (y) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 1.13 immediately preceding the date of on which such incurrence additional Indebtedness is incurred or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Disqualified Stock or Acquired Disqualified Stock had been incurred or preferred stock is issued at the beginning of such four-quarter pursuant to this clause (12), taken as one period, would not be (x) at least 2.0 to 1 or (y) equal to or greater less than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company was immediately prior to giving pro forma effect to such transaction.acquisition or other transaction and the incurrence of such Indebtedness or issuance of such Disqualified Stock or preferred stock;
(c13) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness arising from agreements of the Company or such a Restricted Subsidiary Guarantor unless such Indebtedness is also contractually subordinated providing for customary indemnification, obligations in right respect of payment to earnouts or other adjustments of purchase price or, in each case, similar obligations, in each case, incurred or assumed in connection with the Notes and acquisition or disposition of any business or assets or Person or any Equity Interests of a Subsidiary; provided that (in the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right case of payment to any other Indebtedness a disposition) the maximum liability of the Company solely 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 virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.the Company and its Restricted Subsidiaries in connection with such disposition;
(d14) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 incurrence by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant of Indebtedness in the form of Unearned Customer Deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business;
(15) Indebtedness of the Company or any Restricted Subsidiary incurred in connection with credit card processing arrangements or other similar payment processing arrangements entered into in the ordinary course of business;
(16) the incurrence by the Company or any Restricted Subsidiary of Indebtedness, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock to this Section 4.11 shall not be deemed finance the replacement (through construction or acquisition) of a Vessel upon an Event of Loss of such Vessel 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 Event of Loss in excess of amounts actually used to be exceeded solely as a result repay Indebtedness secured by the Vessel subject to such Event of fluctuations Loss and any costs and expenses incurred by the Company or any of its Restricted Subsidiaries in exchange rates connection with such Event of Loss;
(17) the incurrence by the Company or currency values.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;
(18) the incurrence of Indebtedness by the Company or any Restricted Subsidiary of Indebtedness, the issuance by the Company or any Restricted Sub
Appears in 1 contract
Sources: Indenture (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The No Company shall not, and shall not permit any of its Restricted Subsidiaries toEntity will, 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 will not or issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; providedStock, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio except for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted DebtIndebtedness”):
(1) Indebtedness under the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities Agreement in an aggregate principal amount at any one time outstanding under this clause (1) (with letters Letters of credit Credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of $142.0 million plus any Incremental LC Facility, and any Replacement Credit Facilities (iless, if applicable, any Guarantees issued pursuant to clause (13) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionbelow);
(2) the incurrence by Note Guarantees and guarantees of the Note Guarantors of Indebtedness of the Company under the Credit Facilities (including any Incremental LC Facility and its Restricted Subsidiaries of the Existing Indebtednessany Replacement Credit Facilities);
(3) the incurrence by Wildcat Sale Leaseback to the Company and the Subsidiary Guarantors of extent constituting Indebtedness;
(4) Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture(including any Note Guarantee);
(45) the incurrence by the Indebtedness of any Project Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations(i) secured equipment or similar financings (where the security interests are incurred, mortgage financings and the Indebtedness secured thereby is created, within 60 days after the acquisition or construction of the relevant property, plant or equipment) 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 or usable in a Permitted Businessthe business of the Project Companies in the ordinary course and (ii) Capital Lease Obligations of any Project Company, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business;
(117) 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) 8) contingent obligations arising from indemnities provided under the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed Financing Documents and the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionProject Contracts;
(139) obligations of any Project Company under Permitted Commodity Hedge Agreements to the incurrence by the Company or a Restricted Subsidiary of extent constituting Indebtedness;
(10) Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnificationnetting services, adjustment of purchase price or similar obligationsoverdraft protection, in each case, incurred cash management obligations and otherwise in connection with the disposition of any businessdeposit, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into securities and commodities accounts in the ordinary course of business;
(1511) the incurrence by intercompany loans among the Company of Indebtedness to and/or any of its Subsidiaries incurred in connection with the purchase Project Companies resulting from the flow of accounts receivable and related assets by funds among the Company from Entities, so long as such loans are fully subordinated to the Senior Obligations pursuant to an agreement containing the terms attached as Exhibit F hereto and not secured by any such Subsidiary which assets are subsequently conveyed by of the Company in connection with a Receivable Facility; andCollateral;
(1612) the incurrence by the Company or any of its Restricted Subsidiaries of additional unsecured Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 10.0 million; and
(1713) the incurrence or issuance, as the case may be, any Guaranty by the Company or any Restricted Subsidiary on behalf of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect a Project Company to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio secure obligations under a Project Contract related to decommissioning costs for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding benefit of a Governmental Authority, to the date of extent such incurrence or issuancecredit support is required by applicable law, determined on up to a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued maximum aggregate amount at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) any time equal to or greater than it would have been immediately preceding such incurrence or an amount that, when combined with the aggregate amount of all outstanding LC Loans and the available amount of all outstanding Letters of Credit (iibut excluding LC Loans and Letters of Credit under any Incremental LC Facility) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactiondoes not exceed $132.0 million.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(db) For purposes of determining compliance with this Section 4.114.07, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1) through (1712) of Section 4.11(b)paragraph (a) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.07, the Company will be permitted to classify and later reclassify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.114.07 and will be entitled to divide the amount and type of such Indebtedness among more than one of such clauses under this Section 4.07. Indebtedness under the Credit Facilities outstanding on the date on which 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 DebtIndebtedness. All Indebtedness shall be denominated in U.S. dollars.
(c) The accrual amount of interestany Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the accretion or amortization case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the payment lesser of:
(A) the Fair Market Value of interest on any Indebtedness in such assets at the form date of additional Indebtedness with determination; and
(B) the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares amount 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesPerson.
Appears in 1 contract
Sources: Indenture (Exelon Generation Co LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuer will not, and shall will 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 Issuer will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stockPreferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or and any Restricted Subsidiary may issue Disqualified Preferred Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock is issued would have been at least 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified 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) The foregoing provisions of Section 4.11(a4.2(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness incurred by the Issuer or a Restricted Subsidiary under Credit Facilities together with the incurrence by of the Company or any Restricted Subsidiary guarantees thereunder and the issuance and creation 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) 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 and its Subsidiaries thereunder) face amount thereof), up to an aggregate principal amount at any time outstanding not to exceed the greater of (ix) 30.0% of $2,250.0 million and (y) an amount such that the Consolidated Net Tangible Assets or Secured Leverage Ratio of the Issuer shall not exceed 2.50 to 1.0, determined on a pro forma basis (ii) $600.0 millionincluding a pro forma application of the net proceeds therefrom), provided, that for purposes of calculating the Consolidated Net Secured Leverage Ratio pursuant to this clause (1)(y), any Indebtedness under a revolving credit facility shall be computed based on the average daily balance of such Indebtedness during the applicable four-quarter reference period;
(2) the incurrence Indebtedness represented by the Company and its Restricted Subsidiaries of Notes issued on the Existing IndebtednessIssue Date (including any Guarantee);
(3) the incurrence by the Company Existing Indebtedness (other than Indebtedness described in clauses (1) and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture(2));
(4) the incurrence Indebtedness (including Capitalized Lease Obligations) incurred or issued 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 usable useful in a Permitted Business, Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amountamount that, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace defease or replace discharge any Indebtedness then outstanding incurred pursuant to this clause (4), does not to at any one time outstanding exceed the greater of (ix) 1.0$200.0 million and (y) 4.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingTotal Assets;
(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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due constituting reimbursement obligations with respect to the Notes, in the case letters of the Company, or the 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations credit issued in the ordinary course of business and not for speculative purposes;
(9) the guarantee by the Company or any business, including, without limitation, letters of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness credit in respect of workers’ compensation claims; , health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or similar obligations; the financing of insurance premiums; bankersother Indebtedness with respect to reimbursement-type obligations regarding workers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of businesscompensation claims;
(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 Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for customary indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the acquisition or disposition of any business, assets or subsidiary, Subsidiary of the Issuer or any Restricted Subsidiary (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary Subsidiary for the purpose of financing such acquisition) and earnout provisions or contingent payments in respect of purchase price or adjustment of purchase price or similar obligations in acquisition agreements;
(7) Indebtedness of the Issuer or any Restricted Subsidiary of intercompany Indebtedness between or among the Issuer and 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 or any Guarantor is the obligor on such 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 or of such Guarantor with respect to its Guarantee;
(8) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or a Restricted Subsidiary; provided that the maximum aggregate liability any subsequent issuance or transfer of any Capital Stock or any other event which results in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or 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 connection with each case to be an issuance of such dispositionshares of Preferred Stock;
(149) Hedging Obligations of the incurrence Issuer or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting (A) interest rate risk with respect to any Indebtedness that is permitted by the Company terms of this Indenture to be outstanding or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements (B) exchange rate risk with respect to any currency exchange or (C) commodity risk or otherwise entered into in the ordinary course of business;
(1510) the incurrence self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees provided by the Company Issuer or any Restricted Subsidiary or obligations in respect of Indebtedness letters of credit related thereto, in each case provided in the ordinary course of business, including those incurred to any secure health, safety and environmental obligations in the ordinary course of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; andbusiness;
(16a) Indebtedness or Preferred Stock of the incurrence by the Company Issuer or any of its Restricted Subsidiaries of additional Indebtedness Subsidiary in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Issuer since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer and, to the extent actually contributed to the Issuer, the Issuer’s direct or indirect parent entities or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions or accreted valueproceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (iii)(B) and (iii)(C) of Section 4.1(a)(4) and (b) 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, as applicable) at any time outstanding, including when aggregated with the principal amount and liquidation preference of all Permitted Refinancing other Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness and Preferred Stock then outstanding and incurred pursuant to this clause (1611), does not at any one time outstanding exceed the greater of (x) $250.0 million and (y) 5.0% of Total Assets; provided, that any Indebtedness or Preferred Stock incurred pursuant to this clause (11)(b) shall cease to be deemed incurred or outstanding for purposes of this clause (11)(b) but shall be deemed incurred for the issuance purposes of Section 4.2(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 4.2(a) without reliance on this clause (11)(b);
(12) any guarantee by the Company Issuer or a Restricted Subsidiary of Indebtedness or other obligations of any Disqualified Stock and Restricted Subsidiary so long as the incurrence of such Indebtedness or obligations incurred by 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 under Section 4.2(a) and clause (2), (3), (4) and (11)(a) above, this clause (13) or clause (14) below or any Indebtedness issued to so refund or refinance such Indebtedness including additional preferred stockIndebtedness 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 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 Issuer or a Guarantor or (y) Indebtedness or Preferred Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness or Preferred Stock of an Unrestricted Subsidiary and (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 fees and expenses incurred in connection with such Refinancing Indebtedness;
(14) Indebtedness or Preferred Stock of Persons that are acquired by the Issuer or any Restricted Subsidiary or merged into the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that such Indebtedness or Preferred Stock is not incurred in connection with or in contemplation of such acquisition or merger; and provided, further, that after giving effect to such acquisition or merger, either (A) the Issuer or such Restricted Subsidiary would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.2(a) or (B) the Fixed Charge Coverage Ratio would not be lower 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 ordinary course of business;
(16) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;
(17) Indebtedness consisting of (x) the financing of insurance premiums or (y) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(18) Indebtedness of Foreign Subsidiaries of the Issuer; provided, however, that the aggregate principal amount of Indebtedness outstanding at any one time incurred under this clause (18) does not exceed the greater of (x) $250.0 million and (y) 5.0% of Total Assets;
(19) Indebtedness incurred after the Issue Date on behalf of or representing guarantees of Indebtedness of joint ventures and non-wholly owned subsidiaries that are not Guarantors outstanding at any one time incurred under this clause (19) not to exceed the greater of (ix) 5.0$350.0 million and (y) 7.5% of Consolidated Net Tangible Total Assets and at any time outstanding;
(ii20) $100.0 millionIndebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a Securitization Subsidiary (except for Standard Securitization Undertakings); and
(1721) the incurrence or issuanceall premium (if any), as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis interest (including a pro forma application of the net proceeds therefrompost-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (1) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be through (x20) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionabove.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, 4.2:
(1) 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 (1721) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a4.2(a), the Company Issuer will be permitted permitted, in its sole discretion, to classify and later from time to time reclassify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. 4.2, and such item of Indebtedness will be treated as having been incurred pursuant to only one of such categories;
(2) 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 Debt shall be disregarded;
(3) accrual of interest or dividends, the accretion of accreted value and the payment of interest or dividends in the form of additional Indebtedness or Preferred Stock will not be deemed to be an incurrence of Indebtedness or Preferred Stock for purposes of this Section 4.2;
(4) Indebtedness under the Credit Facilities Agreement and any other Credit Facility outstanding on the date on which 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 Section 4.2(b)(1);
(15) of the definition of Permitted Debt. The accrual of interestwhere Indebtedness is denominated in a currency other than U.S. dollars, the accretion or amortization amount of original issue discount, such Indebtedness will be the payment U.S. Dollar Equivalent determined on the date 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 4.11such incurrence; provided, in each such casehowever, that if any such Indebtedness that is denominated in a different currency is subject to a currency Hedge Agreement with respect to U.S. dollars covering principal payable on such Indebtedness, the amount thereof of such Indebtedness expressed in U.S. dollars will be adjusted to take into account the effect of such agreement; provided further, however, that if any Indebtedness is included incurred to refinance other Indebtedness denominated in Fixed Charges a currency other than U.S. dollars, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if the U.S. Dollar Equivalent is 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 (denominated in such non-U.S. dollar currency) does not exceed the principal amount of such Indebtedness being Refinanced (denominated in the same currency) except to the extent that such U.S. Dollar Equivalent was determined based on a currency Hedge Agreement, in which case the principal amount of the Company as accrued. Notwithstanding any other provision of this Section 4.11, Refinancing Indebtedness will be determined in accordance with the preceding sentence; and
(6) the maximum amount of Indebtedness that the Company or any Issuer and the Restricted Subsidiary Subsidiaries may incur pursuant to this Section 4.11 4.2 shall not be deemed to be exceeded exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rates rate of currencies. Unsecured Indebtedness will not be treated as subordinated or currency valuesjunior to Secured Indebtedness merely because it is unsecured nor will Senior Indebtedness be treated as subordinated or junior to any other Senior Indebtedness merely because it has a junior priority with respect to the same collateral.
Appears in 1 contract
Sources: First Supplemental Indenture (Rockwood Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a2.01(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1i) Indebtedness under the incurrence by the Company 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 not to exceed the greater of $4,000.0 million and 7.5% of Total Tangible Assets of the Company, (ii) Indebtedness under this clause (1) (with letters of credit being deemed to have a the EIB Facility in an aggregate principal amount equal at any time outstanding not to exceed the maximum potential liability greater of €203.4 million and 0.6% of Total Tangible Assets of the Company and its Subsidiaries thereunderCompany, (iii) Indebtedness under the Existing Revolving Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (ix) 30.0the sum of $1,700.0 million, €1,000.0 million and £300.0 million and (y) 7.3% of Consolidated Net Total Tangible Assets or of the Company, (iiiv) Indebtedness under the Existing First-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of $4,192.0 million and 9.7% of Total Tangible Assets of the Company, (v) Indebtedness under the Existing Term Loan Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $1,860.0 million and €800.0 million and (y) 6.3% of Total Tangible Assets of the Company, (vi) Indebtedness under the 2026 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) the sum of $775.0 million and €425.0 million and (y) 2.6% of Total Tangible Assets of the Company and (vii) Indebtedness under the 2027 Second-Priority Secured Notes in an aggregate principal amount at any time outstanding not to exceed the greater of (x) $600.0 million900.0 million and (y) 1.7% of Total Tangible Assets of the Company;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Existing Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred Indebtedness under Section 4.11(a) or clause (2the Convertible Notes, the EIB Facility, the Existing Term Loan Facility, the Existing First-Priority Secured Notes, the 2026 Second-Priority Secured Notes, the 2027 Second-Priority Secured Notes and the 2026 Unsecured Notes), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance2026 Unsecured Notes and related guarantees, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13x) the incurrence by the Company or a Restricted Subsidiary sum of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued $1,450.0 million 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.LON59053763
Appears in 1 contract
Sources: Amendment Agreement Relating to a Multicurrency Revolving Facilities Agreement (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”;” with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt) and issue preferred stock, if (a) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 11.0 and (b) to the extent such Indebtedness (including Acquired Debt) constitutes Senior Debt, (i) on any date of determination prior to February 15, 2013, the Senior Net Leverage Ratio is no greater than 4.0 to 1.0 and (ii) on any date of determination on or after February 15, 2013, the Senior Net Leverage Ratio is no greater than 3.50 to 1.0, in each case under clause (a) or (b) above, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, Section 4.11(a10.11(a) will not prohibit the incurrence of any of the following (the items of Indebtedness (collectively, described below in this Section 10.11(b) being referred to collectively as “Permitted Debt”):
(1i) the incurrence by the Company or and 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 (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 (ix) 30.0$220.0 million and (y) 25% of Adjusted Consolidated Net Tangible Assets or (ii) $600.0 millionAssets, determined as of the date of the incurrence of such Indebtedness after giving pro forma effect to such incurrence and the application of the proceeds therefrom;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the Issue Date and the related Guarantees Exchange Notes to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(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 installation, improvement, deployment, refurbishment or improvement modification of property, plant or equipment or furniture, fixtures and equipment, in each case, used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (iA) 1.0$25.0 million and (B) 3.0% of Adjusted Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingAssets;
(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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) or Disqualified Stock of the Company, or Indebtedness (other than intercompany Indebtedness) or preferred stock of a Restricted Subsidiary, in each case that was permitted by this Supplemental Indenture to be incurred or issued under Section 4.11(a10.11(a) or clause clauses (2ii), (3iii), (4iv), (5v), (16x), (xvi) or (17xvii) of this Section 4.11(b10.11(b);
(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 (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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 (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, 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 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 CompanySubsidiary; 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; Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7vii);
(8) viii) the incurrence by of obligations of the Company or any of its a Restricted Subsidiaries of Hedging Obligations Subsidiary pursuant to Interest Rate and Currency ▇▇▇▇▇▇, in each case entered into in the ordinary course of business for the purpose of limiting risks that arise in the ordinary course of business of the Company and not for speculative purposesits Restricted Subsidiaries;
(9ix) 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 that was permitted to be incurred by another provision of this Section 4.11covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10x) Permitted Acquisition Indebtedness;
(xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) 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;
(12xii) Indebtedness consisting of the incurrence by Foreign Subsidiaries financing of Indebtedness insurance premiums in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed customary amounts consistent with the greater operations and business of (i) 5.0% of Consolidated Net Tangible Assets the Company and (ii) $100.0 millionits Restricted Subsidiaries;
(13xiii) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiaryCapital Stock of a 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 shall at no time exceed the gross proceeds actually received by the Company or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;
(14xiv) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness consisting constituting reimbursement obligations with respect to letters of take-or-pay obligations contained in supply agreements entered into 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 one year following such drawing or incurrence;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in the form of Guarantees of Indebtedness of joint ventures; provided that the aggregate principal amount of the Obligations incurred pursuant to such Guarantees shall not exceed the greater of $25.0 million and 3.0% of Adjusted Consolidated Net Tangible Assets, determined as of the date of each incurrence of such Guarantee after giving pro forma effect to the application of proceeds of the Indebtedness being guaranteed;
(xvi) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate amount at any time outstanding pursuant to this clause (xvi), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (xvi), not to exceed 15% of such Foreign Subsidiaries’ Adjusted Consolidated Net Tangible Assets, determined as of the date of each incurrence, in the applicable foreign currency; and
(xvii) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at that, when taken together with all other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the date of such incurrence (other than Indebtedness permitted by clauses (i) through (xvi) above or Section 10.11(a)) and any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, xvii) does not to exceed the greater of (ix) 5.02.5% of Adjusted Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, determined as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or Indebtedness and (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction$20.0 million.
(c) The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee Subsidiary Guarantee, on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.1110.11, 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 (17xvii) of Section 4.11(b10.11(b), or is entitled to be incurred pursuant to Section 4.11(a10.11(a), the Company will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or later divide and reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 Debt10.11. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11covenant; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness and issuance of preferred stock, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term 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 4.1110.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 10.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates or rate of currencies. The principal amount of any Permitted Refinancing Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency valuesfrom the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: First Supplemental Indenture (Petroleum Development Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Parent will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt); the Parent will not, and the Company will not permit any of its Restricted Subsidiaries to, issue any Disqualified Stock Stock; and the Parent will not permit any of its Restricted Subsidiaries to issue any shares of other preferred stocksecurities; providedunless, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or other preferred securities are issued, the Parent’s Fixed Charge Coverage Ratio would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or other preferred securities had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):) or the issuance of any preferred securities described in Section 4.09(b)(10) below:
(1) the incurrence by the Company Parent or any of its Restricted Subsidiary Subsidiaries of additional Indebtedness and letters of credit under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence (including the application of the proceeds therefrom), the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1Section 4.09(b)(1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company Parent and its Subsidiaries thereunder) and then outstanding does not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets $680.0 million or (ii) the sum of (x) $600.0 million300.0 million and (y) 30.0% of the Parent’s Consolidated Net Tangible Assets;
(2) the incurrence by the Company and Parent or its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company Issuers and the Subsidiary Guarantors any Guarantor of Indebtedness represented by (a) the Initial Notes and the related Note Guarantees to be and (b) the Exchange Notes and the related Note Guarantees issued pursuant to this Supplemental Indentureany Registration Rights Agreement;
(4) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Parent or usable in a Permitted Business, in an aggregate principal amountany of its Restricted Subsidiaries, including all Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause Section 4.09(b) (4), provided that after giving effect to such incurrence (including the application of the proceeds therefrom) the aggregate principal amount of all Indebtedness incurred pursuant to this Section 4.09(b)(4) and then outstanding does not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets $40.0 million and (ii) $20.0 million at any time outstanding3.0% of the Parent’s Consolidated Net Tangible Assets;
(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 to, extend, renew, refund, refinance, renewreplace, defease or replace discharge Indebtedness of the Parent or any of its Restricted Subsidiaries (other than intercompany Indebtedness) ), in each case, that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) or clause (2Section 4.09(b)(2), (3), (4), (5), ) or (16) or (17) of this Section 4.11(b4.09(b) (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, including between or among its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Subsidiary Guarantor Parent is the obligor on such Indebtedness and the payee an Issuer or a Subsidiary Guarantor is not the Company or a Subsidiary Guarantorobligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Parent’s Note Guarantee, or if a Subsidiary Guarantor or an Issuer is the obligor on such Indebtedness and neither the Parent nor another Subsidiary Guarantor or an Issuer is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Note Guarantee of such Subsidiary Guarantor or the Notes, as the case may be, except, in any case, in respect of intercompany Indebtedness incurred in the case ordinary course of business in connection with the cash management operations of the Company, or the Guarantee, in the case of a Subsidiary GuarantorParent and its Restricted Subsidiaries; 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 neither the Company or Parent nor a Restricted Subsidiary of the Company Parent will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company Parent or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6Section 4.09(b)(6);
(7) the incurrence by the Parent or any of its Restricted Subsidiaries of obligations under Hedging Contracts;
(8) the guarantee by the Parent or any of its Restricted Subsidiaries of Indebtedness of the Parent or any of its Restricted Subsidiaries that was permitted to be incurred by another provision of this Section 4.09; provided that in the event such Indebtedness being guaranteed is subordinated in right of payment to the Notes or the Note Guarantees, then the guarantee shall be subordinated in right of payment to the Notes or the Note Guarantees, as the case may be;
(9) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, bank guarantees, warehouse receipt or similar facilities, property, casualty or liability insurance, take-or-pay obligations in supply arrangements, self-insurance obligations or completion, bid, performance, surety, customs, appeals and advance payment bonds, standby letters of credit or surety and similar obligations issued for the account of the Parent and any of its Restricted Subsidiaries in the ordinary course of business or in connection with the enforcement of rights or claims of the Parent or any of its Restricted Subsidiaries or in connection with judgments that do not result in a Default or an Event of Default, including guarantees or obligations of the Parent or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);
(10) the issuance by any of the CompanyParent’s Restricted Subsidiaries to the Company Parent or to any of its Restricted Subsidiaries of shares of any preferred stocksecurities; provided, however, that:
(Aa) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock securities 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 securities to a Person that is not either the Company Parent or a Restricted Subsidiary of the Company; will Parent shall be deemed, in each case, to constitute an issuance issuance, sale or other transfer (as of the date of such issuance, sale or other transfer) of such preferred stock securities by such Restricted Subsidiary that was not permitted by this clause (7Section 4.09(b)(10);
(8) 11) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Hedging Obligations liability in respect of the Indebtedness of any Unrestricted Subsidiary of the Parent or any Joint Venture but only to the extent that such liability is the result of the Parent’s or any such Restricted Subsidiary’s guarantee of such Indebtedness or of the Parent or any such Restricted Subsidiary being a general partner of such Unrestricted Subsidiary or Joint Venture and provided that, after giving effect to any such incurrence, the aggregate principal amount of all Indebtedness incurred under this Section 4.09(b)(11) and then outstanding does not exceed the greater of (i) $65.0 million and (ii) 5.0% of the Parent’s Consolidated Net Tangible Assets;
(12) the incurrence by the Parent or any of its Restricted Subsidiaries of (i) Indebtedness representing deferred compensation to directors, officers, members of management or employees of the Parent or any of its Restricted Subsidiaries and incurred in the ordinary course of business and not for speculative purposes(ii) Indebtedness consisting of promissory notes issued by the Parent or any of its Restricted Subsidiaries to any current or former employee, director or consultant of the Parent (or any direct or indirect parent of the Parent) or any of its Restricted Subsidiaries (or permitted transferees, assigns, spouses or former spouses, estates or heirs of such employee, director or consultant), to finance the purchase or redemption of Equity Interests of the Parent (or any direct or indirect parent of the Parent) that is permitted by Section 4.07;
(913) the guarantee incurrence by the Company Parent or any of its Restricted Subsidiaries of Indebtedness arising in connection with endorsement of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) instruments for deposit in the ordinary course of business;
(1114) the incurrence by the Company Parent or any of its Restricted Subsidiaries of any obligation, or guarantee of any obligation, to reimburse or indemnify a Person extending credit to customers of the Parent or any of its Restricted Subsidiaries incurred in the ordinary course of business or consistent with past practice for all or any portion of the amounts payable by such customers to the Persons extending such credit;
(15) the incurrence by the Parent or any of its Restricted Subsidiaries of Indebtedness arising from to a customer to finance the honoring by a bank or other financial institution acquisition of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of equipment necessary for the Company or such Restricted Subsidiary providing to perform services 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into customer in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company Parent or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness; and
(17) the incurrence by the Parent or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time then outstanding, including all any Permitted Refinancing Indebtedness incurred to extend, renew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16Section 4.09(b)(17), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, does not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence 65.0 million or (ii) 5.0% of the Parent’s Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) Tangible Assets. For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness (including Acquired Debt), Disqualified Stock or other preferred securities meets the criteria of more than one of the categories of Permitted Debt described in clauses (1Section 4.09(b)(1) through (17) of Section 4.11(b)above, or is entitled to be incurred or issued pursuant to Section 4.11(a4.09(a), the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11covenant. Any Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued Issue Date shall be considered incurred under Section 4.09(b)(1) and authenticated under this Supplemental Indenture will initially may not later be deemed classified or reclassified as incurred pursuant to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted DebtSection 4.09(a). 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 accrual, accumulation or payment of dividends on Disqualified Stock or other preferred securities in the form of additional shares or units of the same class of Disqualified Stock or other preferred securities, as the case may be, will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or other preferred securities for purposes of this Section 4.11; provided4.09. For purposes of this Section 4.09, (i) unsecured Indebtedness of any Person will not be deemed to be subordinated in right of payment to secured Indebtedness of that Person merely because it is unsecured and (ii) Indebtedness of any Person will not be deemed to be subordinated in right of payment to Indebtedness of a Restricted Subsidiary of such Person merely because it is structurally subordinated thereto. Further, the accounting reclassification of any obligation of the Parent or any of its Restricted Subsidiaries as Indebtedness will not be deemed an incurrence of Indebtedness for purposes of this Section 4.09. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in each the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such caseIndebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, that and such refinancing would cause the applicable U.S. dollar-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount thereof is included in Fixed Charges of such refinancing Indebtedness does not exceed the Company as accruedprincipal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Parent and its Restricted Subsidiary Subsidiaries may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates or rate of currencies. The principal amount of any Permitted Refinancing Indebtedness, if incurred in a different currency valuesfrom the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Sources: Indenture (Exterran Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) . The proceeding paragraph will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or any and its Restricted Subsidiary Subsidiaries 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 lesser of (i) 30.0% of Consolidated Net Tangible Assets or (iix) $600.0 million30.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries to repay Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 and (y) the amount of the Borrowing Base as of the date of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe 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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price of point of sale equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (5), not to exceed $5.0 million;
(6) the incurrence by the Company or any of its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph of this covenant or clause clauses (2), (3), (4), (5), (166) or (1713) of this Section 4.11(b)paragraph;
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly Owned Restricted SubsidiariesSubsidiaries or a Guarantor; provided, however, that:
: (Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee obligor is not a Guarantor or the Company or a Subsidiary GuarantorCompany, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary Guarantee, in the case of a Subsidiary Guarantor; andand (b)
(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 or a Guarantor 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 or a Guarantor; 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging (i) interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (ii) currency values with respect to transactions entered into by the Company or a Restricted Subsidiary in the ordinary course of business and not for speculative purposesbusiness;
(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 that to the extent such Indebtedness was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedcovenant;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, ;
(11) the maximum amount of Indebtedness that incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of performance, bid or advance payment bonds, surety bonds, custom bonds, utility bonds and similar obligations arising in the ordinary course of business;
(12) 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, in each case incurred or assumed in connection with the disposition of any business, asset or Subsidiary may incur of the Company, provided that the maximum assumable Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 4.11 clause (13), not to exceed $5.0 million. The Company will 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 not be deemed to be exceeded contractually subordinated in right of payment to any other Indebtedness of the Company solely as by virtue of being unsecured. 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 (13) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a result portion of fluctuations such item of Indebtedness, in exchange rates or currency valuesany manner that complies with this Section. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture 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.
Appears in 1 contract
Sources: Indenture (G & G Retail Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness or issue preferred stock, in each case, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any of its Restricted Subsidiary Subsidiaries 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 (ia) 30.0$150.0 million or (b) 15% of Consolidated Net Tangible Assets or (ii) $600.0 millionas of the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenturethe 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 (as defined by GAAP) used in the business of the Company or usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (16) or (1713) of this Section 4.11(b4.09(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(Bb) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the 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 Company, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9) 8) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision ;
(10) Indebtedness in respect of this Section 4.11bid, performance or surety bonds issued for the maximum amount account of Indebtedness that the Company or any Restricted Subsidiary may thereof in the ordinary course of business, including guarantees or obligations of the Company or any Restricted Subsidiary thereof with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(11) Vessel Financing incurred by a Financing Subsidiary to finance the acquisition of marine vessels and other marine equipment (including related supplies) for use by the Company or its Restricted Subsidiaries in the ordinary course of business, provided that such Vessel Financing will be on terms more favorable than would otherwise be available to the Company from a non-governmental source at the time of such Vessel Financing;
(12) Indebtedness of a Person incurred and outstanding on or prior to the date on which such Person was acquired by the Company (other than Indebtedness incurred in connection with, or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction, or series of related transactions, pursuant to which such Person became a Subsidiary or was acquired by the Company), provided however, that on the date of such acquisition and after giving pro forma effect thereto, the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to Section 4.09(a) hereof ; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this Section 4.11 clause (13), not to exceed $20.0 million. 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 exceeded contractually subordinated in right of payment to any other Indebtedness of the Company solely as by virtue of being secured on a result junior basis or by virtue of fluctuations being unsecured.
(c) For purposes of determining compliance with this Section 4.09:
(1) in the event that an item of proposed Indebtedness, including Acquired Debt, meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above or is entitled to be incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence, (or later reclassify such item of Indebtedness, in the Company's sole discretion) in any manner that complies with this Section 4.09; and
(2) for purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rates or currency valuesrate in effect on the date that such Indebtedness was incurred.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stockstock (other than to a Company or the Restricted Subsidiaries of the Company); provided, however, that the Company and its Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Company's Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt) and issue any shares of preferred stock, stock (to the extent otherwise permitted by this Indenture) 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro 159 47 forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or 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 4.11(a) 4.09 will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary and the Guarantors 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 stated amount thereof) and other obligations under Credit Facilities in an aggregate principal amount that does not exceed at any one time $25.0 million less the aggregate amount of the Company and its Subsidiaries thereunder) not all Net Proceeds of Asset Sales applied to exceed the greater repay Indebtedness under a Credit Facility pursuant to Section 4.10 hereof (other than temporary paydowns pending final application of (i) 30.0% of Consolidated such Net Tangible Assets or (ii) $600.0 millionProceeds);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3ii) the incurrence by the Company and the Subsidiary Guarantors of the Existing Indebtedness and letters of credit (including reimbursement obligations with respect thereto) supporting Existing Indebtedness whether such letters of credit are incurred under the Senior Credit Facility or otherwise;
(iii) the incurrence by the Company of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureNotes;
(4iv) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, case incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or usable in a Permitted Businesssuch Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 8.0 million at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was is permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph hereof or clause clauses (2), (3), (4), (5), (16ii) or (17iii) of this Section 4.11(b)paragraph;
(6vi) 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 Subsidiaries160 48 Guarantor; provided, however, that:
that (Ai) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary 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 Guarantor thereof shall 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposesfixing 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 by the Company or any of its Restricted Subsidiaries or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company another Guarantor that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(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 in respect ceases to be Non-Recourse Debt of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performancean Unrestricted Subsidiary, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the such event shall be deemed to constitute an incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnificationthat was not permitted by this clause (ix), adjustment and the issuance 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 preferred stock 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionUnrestricted Subsidiaries;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16x) 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 extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, x) not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million5.0 million at any time outstanding); andor
(17xi) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary Subsidiaries that are not Guarantors of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified StockInternational Facility Loans under (and as defined in) the Senior Credit Facility; provided that immediately the aggregate principal amount of all Indebtedness outstanding under such International Facility Loans after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) does not exceed an amount equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) $35.0 million. For purposes of determining compliance with this Section 4.114.09, 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 (17x) of Section 4.11(b), above or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.161 49
Appears in 1 contract
Sources: Senior Subordinated Note Purchase Agreement (Transtechnology Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1i) Indebtedness under the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0$3,000.04,500.0 million and 6.98.6% of Consolidated Net Total Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 under 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness EIB Facility in an aggregate principal amount at any time outstanding pursuant not to this clause exceed the greater of €203.4 million and 0.6% of Total Tangible Assets of the Company, (12), including all Permitted Refinancing iii) Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), under the Existing Multicurrency Facility in an aggregate principal amount at any time outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13x) the incurrence by the Company or a Restricted Subsidiary sum of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification$1,700.0 million, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable €1,000.0 million and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), £300.0 million and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth 7.3% of the Company would be greater than the Consolidated Net Worth Total Tangible Assets of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.the
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee permit, suffer to exist or otherwise be or become directly or indirectly liableliable with respect to, contingently or otherwise, with respect to otherwise (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 Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries any Guarantor may incur Indebtedness or issue preferred stock, directly or indirectly create or incur or otherwise be or become liable with respect to any Guarantee if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items conditions are satisfied:
(a) with respect to an incurrence of Indebtedness (collectively, “Permitted Debt”):
that is (1) the incurrence by the Company Expansion Debt 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries Permitted Refinancing Indebtedness of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was would have been permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause pursuant to clauses (2a), (3b) or (c) of Section 4.08 of the 2013 Indenture prior to the Investment Grade Date, the Company shall have delivered to the Trustee a certificate of an Authorized Officer of the Company certifying that the amount of all Senior Debt (excluding Working Capital Debt, all Indebtedness or Guarantees incurred pursuant to clauses (f), (4g), (5h), (16i), (j), (k), (l), (m), (o), (p) or and (17q) of this Section 4.11(b4.08, and all Indebtedness or Guarantees that would have been permitted to be incurred pursuant to clauses (f), (g), (h), (i), (j), (k), (l), (m), (o), (p) and (q) of Section 4.08 of the 2013 Indenture prior to the Investment Grade Date) outstanding after giving effect to the incurrence of such Indebtedness and the application of the proceeds therefrom, is capable of being amortized to a zero balance by the termination date of the last to terminate of the Applicable Facility LNG Sale and Purchase Agreements such that the Projected Debt Service Coverage Ratio after the last Guaranteed Substantial Completion Date with respect to any Trains then in construction (or if the In-Service Date has occurred with respect to all Trains, the date of incurrence of the Indebtedness) through the terms of such Applicable Facility LNG Sale and Purchase Agreements, would be at least 1.5 to 1.0; provided that (i) the Projected Debt Service Coverage Ratio shall be calculated (x) solely with respect to Contracted Cash Flow; and (y) using an interest rate equal to the weighted average interest rate of all such Senior Debt outstanding after giving effect to the incurrence of the Indebtedness and the application of the proceeds therefrom and (ii) all of the Indebtedness required or anticipated to be incurred in connection with the construction of each of Train One and Train Two, Train Three and Train Four and Train Five has either been (x) fully funded or (y) no longer has any conditions precedent to funding that have not been satisfied or waived; or
(1) the Indebtedness to be incurred has received at least two Investment Grade Ratings and (2) the Company shall have received (A) letters from any two Acceptable Rating Agencies (or if only one Acceptable Rating Agency is then rating the Notes, the Company shall have received a letter from that Acceptable Rating Agency) to the effect that the Acceptable Rating Agency has considered the contemplated incurrence, and that, if the contemplated incurrence is consummated, such Acceptable Rating Agency would reaffirm the Investment Grade Issue Rating of the Notes as of the date of such incurrence and (B) letters from all other Acceptable Rating Agencies then rating the Notes, if any, to the effect that the Acceptable Rating Agency has considered the contemplated incurrence, and that, if the contemplated incurrence is consummated, such Acceptable Rating Agency would reaffirm its then current rating of the Notes as of the date of such incurrence; or
(c) the Company shall have delivered to the Trustee a certificate of an Authorized Officer of the Company certifying that the amount of all Senior Debt (excluding Working Capital Debt, all Indebtedness or Guarantees incurred pursuant to clauses (f), (g), (h), (i), (j), (k), (l), (m), (o), (p) and (q) of Section 4.08, and all Indebtedness or Guarantees that would have been permitted to be incurred pursuant to clauses (f), (g), (h), (i), (j), (k), (l), (m), (o), (p) and (q) of Section 4.08 of the 2013 Indenture prior to the Investment Grade Date) outstanding after giving effect to the incurrence of the Indebtedness and the application of the proceeds therefrom (A) would have resulted in a Debt Service Coverage Ratio of at least 1.5 to 1.0 for the most recently ended four Fiscal Quarters and (B) is capable of being amortized to a zero balance by the termination date of the last to terminate of the Applicable Facility LNG Sale and Purchase Agreements such that after the last Guaranteed Substantial Completion Date with respect to any Trains then in construction (or if the In-Service Date has occurred with respect to all Trains, the date of incurrence of the Indebtedness) through the terms of such Applicable Facility LNG Sale and Purchase Agreements, the Projected Debt Service Coverage Ratio would be at least 1.5 to 1.0 for each Fiscal Year during such period; provided that (i) each of the Debt Service Coverage Ratio and the Projected Debt Service Coverage Ratio shall be calculated (x) solely with respect to Contracted Cash Flow; and (y) using an interest rate equal to the weighted average interest rate of all such Senior Debt outstanding after giving effect to the incurrence of the Indebtedness and the application of the proceeds therefrom and (ii) all of the Indebtedness required or anticipated to be incurred in connection with the construction of each of Train One and Train Two, Train Three and Train Four and Train Five has either been (x) fully funded or (y) no longer has any conditions precedent to funding that have not been satisfied or waived; and the Company and any Guarantor may incur any of the following items of Indebtedness:
(d) Working Capital Debt of the Company or a Guarantor in an amount not to exceed the sum of (i) $200,000,000 and (ii) an amount required to be expended to purchase Gas to comply with the obligations of the Company under the Facility LNG Sale and Purchase Agreements;
(6e) purchase money Indebtedness or Capital Lease Obligations of the Company or a Restricted Subsidiary of the Company to the extent incurred in the ordinary course of business to finance the acquisition or licensing of intellectual property or items of equipment; provided, that (i) if such obligations are secured, they are secured only by Liens upon the equipment or intellectual property being financed and (ii) the aggregate principal amount and the capitalized portion of such obligations do not at any time exceed $100,000,000 in the aggregate;
(f) other unsecured Indebtedness for borrowed money subordinated to the Obligations pursuant to the form of subordination agreement attached to this Indenture (or otherwise pursuant to an instrument in writing satisfactory in form and substance to the Required Secured Parties (other than the Holders)); provided, that such instrument shall include that: (i) the maturity of such subordinated debt shall be no shorter than the maturity of the latest maturing tranche of Secured Debt; (ii) such subordinated debt shall not be amortized; (iii) no interest payments shall be made under such subordinated debt except from monies held in the Distribution Account and that are permitted to be distributed pursuant to the Accounts Agreement; and (iv) such subordinated debt shall not impose covenants on the Company;
(g) trade or other similar Indebtedness of the Company or a Restricted Subsidiary of the Company incurred in the ordinary course of business, which is (i) not more than 90 days past due, or (ii) being contested in good faith and by appropriate proceedings;
(h) contingent liabilities of the Company or a Restricted Subsidiary of the Company incurred in the ordinary course of business, including the acquisition or sale of goods, services, supplies or merchandise in the normal course of business, the endorsement of negotiable instruments received in the normal course of business and indemnities provided under any of the Transaction Documents;
(i) any obligations of the Company or a Restricted Subsidiary of the Company under Permitted Hedging Agreements;
(j) to the extent constituting Indebtedness, indebtedness of the Company or a Restricted Subsidiary of the Company arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course or other cash management services in the ordinary course of business;
(k) to the extent constituting Indebtedness, obligations of the Company or a Restricted Subsidiary of the Company in respect of performance bonds, bid bonds, appeal bonds, surety bonds, indemnification obligations, obligations to pay insurance premiums, take-or-pay or take-or-deliver obligations contained in supply agreements, cash deposits incurred in connection with natural gas purchases and similar obligations incurred in the ordinary course of business;
(l) Indebtedness of the Company or a Restricted Subsidiary of the Company in respect of any bankers’ acceptance, letter of credit, warehouse receipt or similar facilities entered into in the ordinary course of business;
(m) Indebtedness of the Company or a Restricted Subsidiary of the Company in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;
(n) Indebtedness of the Company or a Restricted Subsidiary of the Company in an amount not to exceed $250,000,000 to finance the restoration of the Project following an Event of Loss;
(o) Indebtedness of the Company or a Restricted Subsidiary of the Company consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries in the ordinary course of business;
(p) 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 clause of this Section 4.08; 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 guaranteed;
(q) 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:
(A1) 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
(B2) (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 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 (6q);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16r) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16r), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) 250,000,000. For purposes of determining compliance with this Section 4.114.08, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in Indebtedness pursuant to clauses (1a) through (17r) of this Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a)4.08, the Company will be permitted to classify or divide such item of Indebtedness on the date of its incurrence, or later reclassify or redivide all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 Debt4.08. 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 reclassification of dividends on Disqualified Stock preferred stock as Indebtedness due to a change in the form of additional shares of the same class of Disqualified Stock accounting principles will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.08; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges Debt Service of the Company as accrued. Notwithstanding any other provision of this Section 4.114.08, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.08 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the least of:
(A) the Fair Market Value of such asset at the date of determination;
(B) the amount of the Indebtedness of the other Person; and
(C) the principal amount of the Indebtedness, in the case of any other Indebtedness.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stockPreferred Stock; provided, however, that (A) the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries (B) any Foreign Subsidiary may incur Indebtedness (including Acquired Debt) so long as neither the Company nor any Guarantor (i) provides credit support of any kind with respect thereto (including any undertaking, agreement or issue preferred stockinstrument that would constitute Indebtedness), if or (ii) is directly or indirectly liable with respect thereto, as a guarantor or otherwise, or (iii) constitutes the Fixed Charge lender thereof, if, in the case of both clauses (A) and (B), (1) no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving pro forma effect to, the incurrence of such Indebtedness or the issuance of such Disqualified Stock and (2) the Consolidated Interest Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 2.25 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(aThe provisions of paragraph (a) will above shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”):"), so long as no Default or Event of Default has occurred and is continuing at the time of incurrence thereof or would be caused thereby:
(1) the incurrence by the Company or any Restricted Subsidiary Guarantor of Indebtedness and letters of credit under one or more Credit Facilities (and the incurrence by the Company or any Guarantor 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 and its Restricted Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets $125.0 million or (ii) $600.0 million;the Borrowing Base or (iii) 65.0% of the Leasing Assets of the Company and the Guarantors, valued at the net book value thereof determined in accordance with GAAP, that are subject to no Lien other than Liens described in clause (1) of the definition of the term "Permitted Liens", in any case less the aggregate amount of all Net Proceeds applied by the Company 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 4.10.
(2) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date hereof and the exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe registration rights agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, construction, installation construction or improvement of property, plant or equipment used in the business of the Company or usable in a Permitted Businesssuch Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 25.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(aparagraph (a) above or clause clauses (2), (3), (4), (5), (169) or (1712) of this Section 4.11(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in respect of (a) interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and other similar agreements or arrangements designed to protect the Company or such Restricted Subsidiary against fluctuations in interest rates, (b) currency swap agreements, currency forward agreements and other similar agreements or arrangements designed to protect the Company or such Restricted Subsidiary against fluctuations in currency exchange rates, and (c) commodity agreements, such as futures contracts, forward contracts, options or other agreements entered into for the purposes of protecting the Company or a Restricted Subsidiary against fluctuations in the price of, or shortage of supply of, commodities used in the ordinary course of business, in each case entered into for risk hedging purposes in the ordinary course of business and not for speculative purposes;
(9) 8) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the 4.09 (other than (x) Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the incurred by Foreign Subsidiaries under paragraph (a) above and (y) Indebtedness guaranteedincurred by Leasing Subsidiaries under clause (11) of this paragraph (b));
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries Subsidiary of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12)outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend refinance or replace any Indebtedness incurred pursuant to this clause (129), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million;
(1310) the incurrence by the Company or a Restricted any Foreign Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 performance guaranties, performance bonds or similar obligations issued or incurred to support such Indebtedness shall Foreign Subsidiary's performance of its obligations under contracts for the supply of rail cars, marine barges or surface transportation equipment, in an aggregate principal amount not to exceed $25.0 million at no any time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionoutstanding;
(1411) the incurrence by the Company or a Restricted any Leasing Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
its equipment leasing business in an aggregate principal amount not to exceed, at the time of incurrence thereof, 75.0% of the net book value (15as determined in accordance with GAAP) the incurrence by of Leasing Assets that are subject to Permitted Liens that secure such Indebtedness, so long as neither the Company or any other Guarantor (a) provides credit support of Indebtedness to any of its Subsidiaries incurred in connection kind with respect thereto (including any undertaking, agreement or instrument that would constitute Indebtedness), or (b) is directly or indirectly liable with respect thereto, as a guarantor or otherwise, or (c) constitutes the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilitylender thereof; and
(1612) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (1612), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 20.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall not incurnot, and shall not permit any Subsidiary Guarantor to incurto, directly or indirectly, incur any Indebtedness which by its terms (including Permitted Debtor by the terms of any agreement governing such Indebtedness) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually expressly subordinated in right of payment to any other Indebtedness of the Company solely or such Guarantor, as the case may be, unless such Indebtedness is also by virtue of being unsecured its terms (or by virtue the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the applicable Subsidiary Guarantee, as the case may be, to the same extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of the Company or such Guarantor, as the case may be. For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term 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 dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being secured refinanced. Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or a Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on a first the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing. The accrual of interest, the accretion or junior Lien basis.
(d) amortization of original issue discount and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09 provided, in each such case, that the amount thereof is included in Adjusted Interest Expense of the Company. For purposes of determining compliance with this Section 4.114.09, 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 (1712) of Section 4.11(b)paragraph (b) above, or is entitled to be incurred pursuant to the paragraph (a) of this Section 4.11(a)4.09, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or and later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values4.09.
Appears in 1 contract
Sources: Indenture (Greenbrier Companies Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) incur any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock Disqualified Stock or Disqualified the Preferred Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any and the Restricted Subsidiary Subsidiaries, 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 the greater greatest of (i) 30.0$350.0 million, (ii) the Borrowing Base in effect under the Credit Agreement at such time, and (iii) $100.0 million plus 32.5% of the Company’s Adjusted Consolidated Net Tangible Assets or (ii) $600.0 milliondetermined 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 Company and the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the Issue Date and the related Guarantees to be issued pursuant to this Supplemental IndentureNote 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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0$25.0 million and (ii) 3.0% of the Company’s Adjusted Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingdetermined 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company or any Preferred Stock of a Restricted Subsidiary, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) or clause clauses (2), (3), (4), (5), (1614), (15) or (1716) of this Section 4.11(b4.09(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 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 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 shares of preferred stockany 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 Obligations in the ordinary course of business and not for speculative purposesObligations;
(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 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall 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 similar obligations; the financing of insurance premiums; bankers’ acceptances; performancebid, plugging and abandonment, appeal, bid completionreimbursement, guarantee performance, surety and surety bonds; similar bonds and completion guarantees provided by the Company or similar requirements (and, in all cases, letters of credit in respect thereof) a Restricted Subsidiary in the ordinary course of businessbusiness or consistent with industry practice or past practice and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or consistent with industry practice or past practice;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign the Company or any of its Restricted Subsidiaries of Indebtedness in-kind obligations relating to net oil, natural gas liquid or natural gas balancing positions arising in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater ordinary course of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionbusiness;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness any obligation arising from agreements of the Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or subsidiary, other than guarantees Capital Stock 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 shall at no time exceed the gross proceeds actually received by the Company or such a Restricted Subsidiary in connection with such dispositiona transaction permitted by this Indenture;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPermitted Acquisition Indebtedness; and
(1615) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation preference at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (1615), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed exceed, at any one time outstanding, the greater of (ia) $40.0 million and (b) 5.0% of the Company’s Adjusted Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, determined as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed 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 (1715) of Section 4.11(b)above, or is entitled to be incurred or issued pursuant to Section 4.11(a4.09(a), the Company 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 4.114.09. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture Escrow Release 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 interestinterest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional shares 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 4.11; provided4.09. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in each 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 case, that assets at the date of determination; and
(2) the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any Indebtedness of the other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesPerson.
Appears in 1 contract
Sources: Indenture (Penn Virginia Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (or, collectively, “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 Subsidiary to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the may permit a Restricted Subsidiaries may Subsidiary to incur Indebtedness or issue preferred stockstock if, if at the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined time of such incurrence or issuance and after giving effect thereto on a pro forma basis Pro Forma Basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), the Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding such incurrence or issuance for which internal financial statements are available, taken as if the additional Indebtedness had one period, would have been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will least 2.0 to 1.0. The foregoing limitations shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Company 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 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 of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 3,260.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries issuance of the Existing IndebtednessNote Guarantees;
(3) the incurrence by the Company and the Subsidiary Guarantors Restricted Subsidiaries of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureExisting 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 issuance of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed Notes on the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingdate hereof;
(5) the incurrence by the Company or any of its and the Restricted Subsidiaries of Permitted Financing Lease Obligations, mortgage financings and/or Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or up to an aggregate at any one time outstanding of the net proceeds greater of which are used to extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtednessi) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a$250.0 million and (ii) or clause (2), (3), (4), (5), (16) or (17) 5.0% of this Section 4.11(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by the Company or any issuance of its Restricted Subsidiaries of intercompany Indebtedness or preferred stock between or among (i) the Company and any of its the 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Subsidiaries 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)Subsidiaries;
(7) the issuance incurrence by any of the Company’s Restricted Subsidiaries to the Company or to any of its and the Restricted Subsidiaries of shares Hedging Obligations not for purposes 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)speculation;
(8) the incurrence by the Company or any of its and the Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of performance bonds, bankers’ acceptances, workers’ compensation claims; , surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements bank overdrafts (and, in all cases, and letters of credit in respect thereof) in the ordinary course of business;
(119) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) 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 (5) Business Days;
(11) the Guarantee by the Company or any Subsidiary Guarantor of Indebtedness of the Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of Indebtedness of another non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.10; provided that if the Indebtedness being Guaranteed is contractually subordinated to the Notes or the Note Guarantees, as applicable, then the Guarantee must be subordinated to the same extent as the Indebtedness Guaranteed;
(12) the incurrence by Foreign the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in an aggregate principal amount at any time outstanding pursuant exchange for, or the proceeds of which are used to repay redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12), including all Permitted Refinancing Indebtedness incurred ) or clause (13) below or that was otherwise permitted to refund, refinance, defease, renew, extend or replace Indebtedness be incurred pursuant to the test set forth in the first paragraph of this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionSection 4.10;
(13) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1613), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed $50.0 million;
(14) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that on a Pro Forma Basis, either (A) the Company’s Fixed Charge Coverage Ratio would be equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such merger, consolidation or other acquisition or (B) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this Section 4.10;
(15) Indebtedness the net proceeds of which have been deposited in escrow to finance the repayment or redemption of such Indebtedness pursuant to customary escrow arrangements pending the release thereof;
(16) Indebtedness that has been discharged;
(17) Indebtedness deemed to exist pursuant to the terms of a Joint Venture agreement as a result of a failure of the Company or a Restricted Subsidiary to make a required capital contribution therein; provided that the only recourse on such Indebtedness is limited to the Company’s or such Restricted Subsidiary’s equity interests in the related Joint Venture;
(i) 5.0% Indebtedness representing deferred compensation to employees of Consolidated Net Tangible Assets the Company or any of its Restricted Subsidiaries incurred in the ordinary course of business, and (ii) $100.0 millionIndebtedness consisting of obligations of the Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with any Investment permitted under Section 4.9; and
(1719) the incurrence or issuance, as the case may be, by Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount up to 100% of Acquired Debtthe Equity Proceeds received by the Company after 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, Acquired Preferred other than proceeds of Disqualified Stock or Acquired Disqualified Stock; provided sales of Equity Interests to the Company or any of its Subsidiaries) to the extent such Equity Proceeds have not been applied pursuant to clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to make Restricted Payments, and provided, that immediately any such Equity Proceeds shall be excluded for purposes of making Restricted Payments pursuant to any of clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to the extent the Company or any Restricted Subsidiary incur Indebtedness in reliance thereon. Notwithstanding the foregoing, Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to incur Indebtedness or issue preferred stock pursuant to the first paragraph of this Section 4.10 or clause (13) above if, after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date aggregate principal amount of Indebtedness of such incurrence Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany Indebtedness between or issuanceamong the Company and the Restricted Subsidiaries) outstanding pursuant to such first paragraph or such clause, determined on a pro forma basis together with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (including a pro forma application of excluding intercompany preferred stock issued between or among the net proceeds therefromCompany and the Restricted Subsidiaries) as if outstanding pursuant to such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter periodprovisions, would be exceed the greater of (x) at least 2.0 to 1 or $1.25 billion and (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth 1.25x Adjusted EBITDA as of the Company would be greater than the Consolidated Net Worth any date of the Company immediately prior to such transaction.
(c) incurrence. The Company shall will not incur, and shall the Company will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or a Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.10, for the avoidance of doubt, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt permitted debt described in clauses (1) through (1719) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.10. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtabove. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.10; provided, in each such case, that the amount thereof is included in Fixed Charges the Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. Dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal, defeasance or exchange, 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 extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.114.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.10 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person. In connection with the incurrence of (i) revolving loan Indebtedness under this Section 4.10 or (ii) any commitment relating to the incurrence of Indebtedness under this Section 4.10 and (in respect of both (i) and (ii)) the granting of any Lien to secure any such Indebtedness, the Company or the applicable Restricted Subsidiary may designate, such incurrence and the granting of any such Lien as having occurred on the date of first incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or granting of any such Lien therefor will be deemed for all purposes under this Indenture to have been incurred or granted on such Deemed Date, including, without limitation, for purposes of calculating the Fixed Charge Leverage Ratio and usage of any other baskets or ratios under this Indenture (as applicable). The amount of Indebtedness that may be incurred pursuant to any provision of this Section 4.10 or secured pursuant to Section 4.11 (i) shall be deemed to include all amounts necessary to renew, refund, redeem, refinance, replace, restructure, defease or discharge any such Indebtedness incurred and/or secured pursuant to such provisions, including after giving effect to additional Indebtedness in an amount equal to the aggregate amount of fees, premia, underwriting discounts and other costs and expenses incurred in connection with such renewal, refund, redemption, refinancing, replacement, restructuring, defeasance or discharge; and (ii) in any case where such amounts are or may be based on Consolidated Total Assets or Adjusted EBITDA (or any ratio of which Adjusted EBITDA is a component), shall not be deemed to be exceeded, with respect to such incurrence or grant of Lien, due solely to the result of fluctuations in the amount of Consolidated Total Assets or Adjusted EBITDA (and, for the avoidance of doubt, such Indebtedness and such Lien will be permitted to be refinanced or replaced notwithstanding that, after giving effect to such refinancing or replacement, such excess will continue).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit Neither Icahn Enterprises nor any of its Restricted Subsidiaries to, directly or indirectly, Guarantor will 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 neither Icahn Enterprises nor any Guarantor will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockStock; provided, however, that the Company Icahn Enterprises or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, if immediately after giving effect to the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis incurrence of additional Indebtedness (including Acquired Debt) or issuance of Disqualified Stock (including a pro forma application of the net proceeds therefrom andtherefrom), the ratio of the aggregate principal amount of all outstanding Indebtedness (excluding Indebtedness incurred or of the type that would be permitted to be incurred pursuant to clauses (4), (7) and (8) of Section 4.08(b)) of Icahn Enterprises and any Guarantor, determined on a consolidated basis between Icahn Enterprises and any Guarantor but on a non-consolidated basis with the Subsidiaries of Icahn Enterprises (other than any Guarantor) and otherwise in the case accordance with GAAP, (including an amount of Acquired Debt, giving pro forma effect Indebtedness equal to the applicable transaction related thereto)principal amount of any Guarantees by Icahn Enterprises or any Guarantor of any Indebtedness of a Person (that is not Icahn Enterprises or a Subsidiary) to the extent such Guarantees were not included in computing Icahn Enterprises’ or any Guarantor’s outstanding Indebtedness) to the Adjusted Controlled Entity Net Worth, as if the additional Indebtedness had would have been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter periodless than 1.15 to 1.
(b) The provisions of Section 4.11(a4.08(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company Icahn Enterprises or any Restricted Subsidiary Guarantor of Indebtedness and letters represented by the Notes to be issued on the date of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionIndenture;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence by the Company Icahn Enterprises 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstanding;
(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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.08(a) or clause clauses (21), (3), (4), (5), (162) or (179) of this Section 4.11(b)4.08(b) or any Existing Indebtedness;
(63) the incurrence by the Company Icahn Enterprises or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Company Icahn Enterprises and any of its Restricted Subsidiaries; provided, however, that:
Subsidiaries (Aincluding Icahn Enterprises Holdings) 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case issuance of a Subsidiary Guarantor; and
(B) (i) Disqualified Stock by 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 Guarantor 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)Icahn Enterprises;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(104) the incurrence by the Company Icahn Enterprises or any Guarantor of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) Hedging Obligations that are incurred in the ordinary normal course of business;
(115) the incurrence by the Company Icahn Enterprises 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 Foreign Subsidiaries Icahn Enterprises or any Guarantor of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionExisting Indebtedness;
(137) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company any agreement entered into by Icahn Enterprises or such Restricted Subsidiary Icahn Enterprises Holdings providing for indemnification, adjustment of purchase price adjustment or similar obligations, in each case, incurred or assumed 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionan asset sale;
(148) Indebtedness of Icahn Enterprises or any Guarantor attributable to Bad Boy Guarantees; and
(9) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company Icahn Enterprises or any of its Restricted Subsidiaries Guarantor of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (169), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, ; not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or 10.0 million at any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit one time outstanding. Neither Icahn Enterprises nor any Subsidiary Guarantor to incur, will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company Icahn Enterprises or such Subsidiary any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee Note Guarantee, as applicable, on substantially identical terms; provided, however, that no Indebtedness will of Icahn Enterprises or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company Icahn Enterprises or any Guarantor for purposes of this paragraph solely by virtue of being unsecured or by virtue of being secured to a lesser extent or on a first or junior Lien basis.
. To the extent Icahn Enterprises or any Guarantor incurs any intercompany Indebtedness, (da) if Icahn Enterprises or any Guarantor is the obligor on such Indebtedness, such Indebtedness (other than intercompany Indebtedness of any Guarantor to or from Icahn Enterprises or another Guarantor) must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (b)(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Icahn Enterprises or a Subsidiary of Icahn Enterprises (including any Guarantor) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Icahn Enterprises or a Subsidiary of Icahn Enterprises (including any Guarantor) shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Icahn Enterprises or any Guarantor, that is not intercompany Indebtedness; provided that in the case of clause (a), that no restriction on the payment of principal, interest or other 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 4.114.08, 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 (1) through (179) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a4.08(a), in each case, as of the Company will be permitted to date of incurrence thereof, Icahn Enterprises shall, in its sole discretion, classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. 4.08 and such Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have treated as having been incurred on pursuant to such date in reliance on clauses or Section 4.08(a), as the exception provided case may be, designated by clause (1) of the definition of Permitted DebtIcahn Enterprises. The accrual of interest, the accretion or amortization of original issue discount, or the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued4.08. Notwithstanding any other provision of this Section 4.114.08, the maximum amount of Indebtedness that the Company Icahn Enterprises or any Restricted Subsidiary Guarantor may incur pursuant to this Section 4.11 4.08 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Icahn Enterprises L.P.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any None of its Restricted Subsidiaries tothe Obligors will, 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 none of the Company Obligors will not issue any Disqualified Stock and will not permit any Stock. The first paragraph of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted DebtIndebtedness”):
(1) the incurrence by the Company or any Restricted Subsidiary Issuer of Indebtedness evidenced by Letters of Credit (and letters of credit the related guarantees thereof by the Guarantors) under the LC Facility and/or comprising one or more Credit Facilities Alternative LCs in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries Obligors thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million335.0 million at any time outstanding;
(2) the incurrence by the Company Issuer of Indebtedness represented by the Initial Notes (and its Restricted Subsidiaries the related Guarantees by the Guarantors) to be issued on the Issue Date and any Additional Notes (including Guarantees thereof by the Guarantors) subsequently issued under this Indenture; provided that no issuance of Additional Notes shall be permitted unless (i) the projected Debt Service Coverage Ratio for each annual period will be at least 1.40 to 1.00 (calculated using one year P90 production assumptions); (ii) there shall be no Default or Event of Default existing at such time under this Indenture or default or event of default existing at such time under the LC Facility; (iii) the date for Facility Substantial Completion of each of the Existing IndebtednessProjects is projected to occur on or before October 1, 2016 (as confirmed by the Independent Engineer); (iv) the Independent Engineer shall have confirmed the projections specified in clause (i) after NY\5800144.17 giving effect to the issuance of such Additional Notes; and (v) each Rating Agency that is then rating the Series A Notes shall have affirmed its initial rating of the Series A Notes;
(3) the incurrence by the Company and the Subsidiary Guarantors any Obligor of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, the business of the Obligors in the ordinary course and in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at any time outstanding;
(54) the incurrence by the Company or any of its Restricted Subsidiaries Obligor of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause clauses (1), (2), (3), (4), (5), (16) or (179) of this Section 4.11(b)4.09;
(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries Obligor of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business;
(116) the incurrence by the Company or any of its Restricted Subsidiaries Obligor 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;
(127) the incurrence by Foreign Subsidiaries any Obligor of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed contingent obligations arising from indemnities provided under the greater of (i) 5.0% of Consolidated Net Tangible Assets Financing Documents and (ii) $100.0 millionthe Project Contracts;
(13) 8) the incurrence by the Company or a Restricted Subsidiary any Obligor of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnificationnetting services, adjustment of purchase price or similar obligationsoverdraft protection, in each case, incurred cash management obligations and otherwise in connection with the disposition of any businessdeposit, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into securities and commodities accounts in the ordinary course of business;
(159) the incurrence by the Company any Obligor of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Unsecured Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (169), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed $10.0 million;
(10) the greater incurrence of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionIndebtedness by any Obligor to any other Obligor; and
(1711) the incurrence or issuanceguarantee by an Obligor of Indebtedness of any other Obligor which Indebtedness is Permitted Indebtedness; provided, as that if the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Permitted Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness being guaranteed is also contractually unsecured and/or subordinated in right of payment to the Notes and Notes, the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will guarantee shall also be deemed to be contractually unsecured and/or subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basisNotes.
(db) For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt Indebtedness described in clauses (1) through (1711) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company Issuer will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities the LC Facility outstanding on the date on which 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 DebtIndebtedness. All Indebtedness shall be denominated in U.S. dollars.
(c) The accrual amount of interestany Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the accretion or amortization case of any Indebtedness issued with original issue discount; NY\5800144.17
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the payment lesser of:
(A) the Fair Market Value of interest on any Indebtedness in such assets at the form date of additional Indebtedness with determination; and
(B) the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares amount 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesPerson.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.;
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or and any Restricted Subsidiary 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 the greater $100.0 million, provided that not more than $25.0 million of such Indebtedness at any one time outstanding under this clause (i1) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionshall be term Indebtedness;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness and the Subordinated Notes;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Initial Notes and the related Note Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement applicable to the Notes;
(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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at any time outstanding;
(5) Indebtedness of a Subsidiary incurred and outstanding on or prior to the date on which such Subsidiary was acquired by the Company (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that for any such Indebtedness outstanding at any time under this clause (5), on the date that such Subsidiary is acquired by the Company, the Company would have been able to incur $1.00 of additional Indebtedness pursuant to clause (a) above after giving effect to the incurrence of such Indebtedness pursuant to this clause (5).
(6) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(aclause (a) above or clause clauses (2), (3), (4), (5), (166) or (1713) of this Section 4.11(b4.09(b);
(67) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Wholly-Owned Restricted Subsidiaries; provided, however, that:
(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 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 Wholly-Owned 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 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 (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Wholly-Owned Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Wholly-Owned Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Wholly-Owned Restricted Subsidiary of the Company; , will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(910) 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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee 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 of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds 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 within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;; and
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries 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 extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 35.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness 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 holders of secured Indebtedness having entered into inter-creditor agreements giving one or more of such holders priority over the other holders in the collateral held by them or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1Sections 4.09(b)(1) through (1713) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with the original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and any of the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for Leverage Ratio, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the same had occurred at the beginning of the Company’s most recently ended four full fiscal quarters quarter period for which internal financial statements are available in accordance with Section 4.21 available, would have been at least 2.0 no greater than 2.75 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor 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) of Section 4.09(b) (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) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 650.0 million;;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings, construction 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 usable in a Permitted Businessany of its Restricted Subsidiaries or used by the Company or any of its Restricted Subsidiaries for the purpose of developing and constructing solar energy systems, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4) of Section 4.09(b), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 100.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (16) or (1716) of this Section 4.11(b4.09(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) (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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; , will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(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 (other than a Project Subsidiary) to the extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the guarantee by any Project Subsidiary of Indebtedness of any other Project Subsidiary;
(11) Permitted Project Undertakings of the Company or any of its Restricted Subsidiaries;
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds 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 of Non-Recourse Debt by any Project Subsidiary;
(15) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (1215), including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, defeasereplace, renew, extend defease or replace discharge any Indebtedness incurred pursuant to this clause (1215), not to exceed $50.0 million (or the greater equivalent thereof, measured at the time of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligationseach incurrence, 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityapplicable foreign currency); and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, as applicable, solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1716) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.11; provided4.09. 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 each a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such case, that the amount thereof is included in Fixed Charges of the Company as accruedIndebtedness was incurred. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):prohibit:
(1i) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 1,700.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii) of this Section 4.09(b);
(3iii) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes (other than Additional Notes) and any Subsidiary Guarantees of the related Guarantees to be issued pursuant to this Supplemental Indentureforegoing;
(4a) the incurrence Indebtedness constituting Finance Lease Obligations and (b) Indebtedness, Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease, improvement, remodeling or refurbishing of Indebtedness represented by Capital Lease Obligations, mortgage financings property (real 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 personal) or equipment that is used or usable useful in a Permitted BusinessBusiness (but excluding the purchase of Capital Stock of any Person), in an provided that the aggregate principal amountamount of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv)(b) does not to exceed the greater of (i) 1.015.0% of Consolidated Net Tangible Assets and (iidetermined as of the time of such incurrence) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under this clause (v), Section 4.11(a4.09(a) or clause clauses (2ii), (3iii), (4iv), (5), (16x) or (17xvi) of this Section 4.11(b)4.09(b) and related interest, premiums, fees and other Obligations;
(6vi) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Indebtedness, Disqualified Stock or preferred stock 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 Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company will shall be deemed, in each casecase under this clause (vi)(B), 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9viii) the guarantee Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company Notes or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceGuarantee, as the case may be, by then the Company related Guarantee shall rank equally in right of payment to the Notes or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuanceGuarantee, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (yb) equal subordinated to the Notes or greater than it would have been immediately preceding such incurrence or (ii) a Subsidiary Guarantee, as the Consolidated Net Worth of case may be, then the Company would related Guarantee shall be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or such Subsidiary Guarantee, as the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.case may be;
(dix) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 and the incurrence of unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC Topic 815 and similar provisions), in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(x) 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 or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this Section 4.114.09(b); provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;
(xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(xiii) Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section 4.09), surety bonds, appeal bonds and other obligations (which, in each such case, that may be in the amount thereof is included form of or secured by letters of credit), in Fixed Charges each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as accruedapplicable) at any time outstanding not to exceed $600.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $300.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred 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 the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, 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 sentence of this Section 4.09, or
(B) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or exercise any other remedies with respect thereto until 91 days after the final Stated Maturity of the Notes; and
(xviii) Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from June 9, 2009 to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of such date to the second anniversary of such date and (iii) $60.0 million; provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation.
(c) No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes).
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) of Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to clause (i) of Section 4.09(b) and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under the Credit Agreement. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates rate of currencies. The principal amount of any Disqualified Stock of the Company or currency valuesa Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
(e) This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) Senior Debt that is secured Indebtedness as subordinated to any other Senior Debt that is secured Indebtedness merely because it has a junior priority with respect to the same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 1 contract
Sources: Indenture (Cinemark Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.09(a) will shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):prohibit:
(1i) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 1,700.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i), (iii) and (xviii) of this Section 4.09(b));
(3iii) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes (other than Additional Notes) and any Subsidiary Guarantees of the related Guarantees to be issued pursuant to this Supplemental Indentureforegoing;
(4iv) the incurrence (a) Indebtedness constituting Finance Lease Obligations and (b) Indebtedness, Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease, improvement, remodeling or refurbishing of Indebtedness represented by Capital Lease Obligations, mortgage financings property (real 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 personal) or equipment that is used or usable useful in a Permitted BusinessBusiness (but excluding the purchase of Capital Stock of any Person), in an provided that the aggregate principal amountamount of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv)(b) does not to exceed the greater of (i) 1.020.0% of Consolidated Net Tangible Assets and (iidetermined as of the time of such incurrence) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under this clause (v), Section 4.11(a4.09(a) or clause clauses (2ii), (3iii), (4iv), (5), (16x) or (17xvi) of this Section 4.11(b)4.09(b) and related interest, premiums, fees and other Obligations;
(6vi) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Indebtedness, Disqualified Stock or preferred stock 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 Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company will shall be deemed, in each casecase under this clause (vi)(B), 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9viii) the guarantee Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.09; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company Notes or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceGuarantee, as the case may be, by then the Company related Guarantee shall rank equally in right of payment to the Notes or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuanceGuarantee, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (yb) equal subordinated to the Notes or greater than it would have been immediately preceding such incurrence or (ii) a Subsidiary Guarantee, as the Consolidated Net Worth of case may be, then the Company would related Guarantee shall be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or such Subsidiary Guarantee, as the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.case may be;
(dix) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 and the incurrence of unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of ASC Topic 815 and similar provisions), in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this covenant;
(x) 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 or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this Section 4.114.09(b); provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided, further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;
(xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(xiii) Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section 4.09), surety bonds, appeal bonds and other obligations (which, in each such case, that may be in the amount thereof is included form of or secured by letters of credit), in Fixed Charges each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock in an aggregate principal amount (or accreted value or liquidation preference, as accruedapplicable) at any time outstanding not to exceed $600.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $300.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred 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 the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, 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 sentence of this Section 4.09, or
(B) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or exercise any other remedies with respect thereto until 91 days after the final Stated Maturity of the Notes;
(xviii) Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from June 9, 2009 to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of such date to the second anniversary of such date and (iii) $60.0 million; provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation;
(xix) (A) Indebtedness of Restricted Subsidiaries of the Company, including Restricted Subsidiaries that are not Guarantors, in an aggregate amount at any one time outstanding under this clause (xix) not to exceed the greater of (i) $50.0 million and (ii) 10% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries 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 and (B) the incurrence of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness incurred under this clause (xix) and related interest, premiums, fees and other Obligations; and
(xx) (A) Indebtedness of Foreign Restricted Subsidiaries of the Company in an aggregate amount at any one time outstanding under this clause (xx) not to exceed the greater of (i) $50.0 million and (ii) 10% of Consolidated Cash Flow of the Company and its Restricted Subsidiaries 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 and (B) the incurrence of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness incurred under this clause (xx) and related interest, premiums, fees and other Obligations.
(c) No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes).
(d) For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xx) of Section 4.09(b), or is entitled to be incurred pursuant to Section 4.09(a), the Company shall be permitted to classify and divide and later classify, reclassify and divide (in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date pursuant to clause (i) of Section 4.09(b) and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness outstanding on the Issue Date under the Credit Agreement. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates rate of currencies. The principal amount of any Disqualified Stock of the Company or currency valuesa Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
(e) This Indenture does not treat (i) unsecured Indebtedness as subordinated to secured Indebtedness merely because it is unsecured, (ii) Senior Debt that is secured Indebtedness as subordinated to any other Senior Debt that is secured Indebtedness merely because it has a junior priority with respect to the same collateral, (iii) any Indebtedness as subordinated to any other Indebtedness merely because of maturity date, order of payment or order of application of funds or (iv) Indebtedness that is not Guaranteed as subordinated to Indebtedness that is Guaranteed merely because of such Guarantee.
Appears in 1 contract
Sources: Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any of its Restricted Subsidiaries may incur Incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries (on a consolidated basis) for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is Incurred would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, Incurred at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence Incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence Incurrence by the Company or and any Restricted Subsidiary Guarantors of Indebtedness under (and letters of credit under Guarantees in respect of) one or more 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 Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or $1,650.0 million and (ii) the sum of $600.0 million500.0 million and 25.0% of the Company’s Consolidated Tangible Assets;
(2) the incurrence Incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence Incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenture(other than any Additional Notes and their related Guarantees);
(4) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or financings, industrial revenue bonds, purchase money obligationsobligations or other Indebtedness, in each case, incurred 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 usable any of its Restricted Subsidiaries, in a Permitted Businesseach case whether through the direct purchase of such assets or through the purchase of Equity Interests of any Person owning such assets, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred Incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred Incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets $300.0 million and (ii) $20.0 million 10.0% of the Company’s Consolidated Tangible Assets at any time outstanding;
(5) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge, in whole or in part, any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred Incurred under Section 4.11(a4.09(a) or clause clauses (2), (3), (4), this clause (5), (16) or (1710) of this Section 4.11(b4.09(b);
(6) 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; 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;
(B) if a 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 case of the Company, or the Note Guarantee, in the case of a Subsidiary Guarantor; and
(BC) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being beneficially held by a Person other than the Company or a Restricted Subsidiary of the Company and 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 Company will be deemed, in each case, to constitute an incurrence Incurrence (as of the date of such issuance, sale or transfer) 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 shares of 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 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 Incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(9) the guarantee by the Company or any of its Restricted Subsidiaries Guarantee of Indebtedness of the Company or a Restricted Subsidiary of to the Company extent that the guaranteed Indebtedness was permitted to be incurred Incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall 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 Permitted Acquisition Indebtedness;
(11) Indebtedness in respect of workers’ compensation claims; , public liability insurance, unemployment insurance, property, casualty or liability insurance, self-insurance obligations or similar obligations; the financing of insurance premiums; bankers’ acceptances; completion, performance, appealbid performance, bid completion, guarantee and appeal or surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business, including Guarantees (not for borrowed money) or obligations with respect to letters of credit supporting such workers’ compensation claims, public liability insurance, unemployment insurance, property, casualty or liability insurance, self-insurance obligations or completion, performance, bid performance, appeal or surety bonds;
(1112) the incurrence Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of Incurrence;
(13) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of the financing of insurance premiums;
(14) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of Treasury Management Arrangements, Incurred in the ordinary course of business; and
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence 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 Incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred Incurred pursuant to this clause (1615), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets $150.0 million and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary 5.0% of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding Consolidated Tangible Assets determined as of the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionIncurrence.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed 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 (1715) of Section 4.11(b4.09(b), or is entitled to be incurred Incurred pursuant to Section 4.11(a4.09(a), the Company will be permitted to divide and classify such item of Indebtedness Indebtedness, Disqualified Stock or Preferred Stock, as applicable, on the date of its incurrenceIncurrence, or later re-divide and reclassify all or a portion of such item of Indebtedness, Disqualified Stock or Preferred Stock, as applicable, in any manner that complies with this Section 4.114.09. Indebtedness under Debt Facilities (including the Senior Credit Facilities Facilities, but excluding the Notes and the related Note Guarantees) outstanding on the date on which Notes are first issued and authenticated under this Supplemental 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 Section 4.09(b) and not Section 4.09(a) or the definition exception provided by clause (2) of Permitted Debt. Section 4.09(b), and may not later be reclassified.
(d) The accrual of interestinterest or Preferred Stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Preferred Stock or Disqualified Stock in the form of additional shares of the same class of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence Incurrence of Indebtedness or an issuance of Preferred Stock or Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued.
(e) The reclassification of any lease or other liability of the Company or any of its Restricted Subsidiaries as Indebtedness due to a change of accounting principles after the Issue Date will not be deemed an Incurrence of Indebtedness for purposes of this Section 4.09.
(f) For purposes of determining any particular amount of Indebtedness under this Section 4.09, Guarantees or Liens supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have Incurred such Indebtedness.
(g) 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, 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-dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. Notwithstanding any other provision of this Section 4.11covenant, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur Incur pursuant to this Section 4.11 covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The principal amount of any Permitted Refinancing Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, Incur, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt)Indebtedness, and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company may incur will be entitled to Incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and any Restricted Subsidiary will be entitled to Incur Indebtedness issue Preferred Stock, if, on the Restricted Subsidiaries may incur Indebtedness date of such Incurrence or issue preferred stockand after giving effect thereto on a pro forma basis, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been be at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period1.0.
(b) Notwithstanding the foregoing provisions of Section 4.11(a4.09(a) hereof, the Company and the Restricted Subsidiaries will not prohibit the incurrence of be entitled to Incur any or all of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) Indebtedness Incurred pursuant to the incurrence by Credit Agreement; provided, however, that, immediately after giving effect to any such Incurrence, the Company 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 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 and then outstanding does not exceed $2.0 billion; provided, that the Company and or its Restricted Subsidiaries thereundercan Incur additional Secured Indebtedness under this clause (1) not if, after giving pro forma effect to exceed such Incurrence, the Consolidated Senior Secured Debt Ratio would be no greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionthan 3.5 to 1.0;
(2) the incurrence by the Company Indebtedness owed to and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence held by the Company or any of its a 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary 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 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 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 Notes (including any Note Guarantee but excluding any Additional Notes);
(4) Indebtedness 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 Company (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 Company); provided, however, that on the date of such acquisition and after giving effect thereto on a pro forma basis, either (i) the Company would be entitled to Incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant or (ii) the Fixed Charge Coverage Ratio of the Company (A) would be at least 1.75 to 1.0 and (B) would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition;
(6) Permitted Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to the first paragraph of this Section 4.09 or pursuant to clause (3), (4), (5), (22) or this clause (6) of Section 4.09(b);
(7) the issuance Hedging Obligations directly related to Indebtedness permitted to be Incurred by any of the Company’s Restricted Subsidiaries to the Company or to any of and its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance pursuant to this Indenture 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 entered into in the ordinary course of business and not for speculative purposes;
(9) the guarantee 8) obligations in respect of worker’s compensation and self insurance and performance, bid, stay, customs, appeal, replevin and surety bonds and performance and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business;
(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 in the ordinary course of business or other cash management services in the ordinary course of business; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten business days of notification to the Company of its Restricted Subsidiaries 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 or a Guarantor of Indebtedness or other Obligations of the Company or any of the Restricted Subsidiaries, (ii) a Foreign Subsidiary of Indebtedness or other Obligations of another Foreign Subsidiary or (iii) a Non-Guarantor Subsidiary of Indebtedness or other Obligations of another Non-Guarantor Subsidiary, in each case so long as the Incurrence of such guaranteed Indebtedness or other obligations by the Company or such Restricted Subsidiary of is permitted under the Company that was permitted to be incurred by another provision terms of this Section 4.11Indenture; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall 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 (i) Capital Lease Obligations and (ii) Attributable Debt, and Permitted Refinancing Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (andthereof, in an aggregate principal amount on the date of Incurrence that, when taken together with the principal amount of all cases, letters of credit in respect thereof) in the ordinary course of business;
other Indebtedness then outstanding and Incurred pursuant to this clause (11) ), does not exceed the incurrence by the Company greater of $50.0 million or any 1.0% 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 DaysTotal Assets;
(12) the incurrence by Indebtedness of Foreign Subsidiaries of Indebtedness and Non-Guarantor Subsidiaries in an aggregate principal amount at any time 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), including all does not exceed the greater of $200.0 million or 5.0% of Total Assets;
(13) Indebtedness Incurred after the Issue Date in respect of Purchase Money Indebtedness and Permitted Refinancing Indebtedness incurred to refundin respect thereof, refinancein an aggregate principal amount on the date of Incurrence that, defease, renew, extend or replace when taken together with the principal amount of all other Indebtedness incurred then outstanding and Incurred pursuant to this clause (1213), does not to exceed the greater of (i) 5.0$125.0 million or 3.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionTotal Assets;
(14) the incurrence by Indebtedness of the Company or a any of the Restricted Subsidiary of Indebtedness Subsidiaries consisting of (i) the financing of insurance premiums with the providers of such insurance or their affiliates or (i) take-or-pay obligations contained in supply agreements entered into agreements, in each case, in the ordinary course of business;
(15) the incurrence by the Company Indebtedness of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries supported by a letter of additional credit issued pursuant to the Credit Agreement in a principal amount not in excess of the stated amount of such letter of credit;
(16) Indebtedness in an aggregate amount not to exceed the foreign currency equivalent of $75.0 million 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, consultants and employees, in an aggregate amount not to exceed $10.0 million at any one time outstanding, and (ii) reimbursements owed to officers, directors, consultants and employees;
(21) Indebtedness consisting of obligations to make payments to current or former officers, directors and employees, their respective estates, spouses or former spouses with respect to the cancellation, purchase or redemption of Equity Interests of the Company to the extent permitted under clause (5) of the second paragraph Section 4.07;
(22) Indebtedness of the Company or a Guarantor incurred in connection with or in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the acquisition by the Company or such Guarantor of property used or useful in a Permitted Business (including a Product) (whether through the direct purchase of assets or the purchase of Capital Stock of, or merger or consolidation with, any Person owning such assets); provided, however, on the date of such Incurrence and after giving effect thereto on a pro forma basis, the Fixed Charge Coverage Ratio (A) would be at least 1.75 to 1.0 and (B) would be 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 $100.0 million;
(24) Indebtedness consisting of obligations under any Permitted Convertible Indebtedness Call Transaction; and
(25) Indebtedness of the Company or of any of its Restricted Subsidiaries in an aggregate principal amount (or accreted valueon the date of Incurrence that, as applicable) at any time outstanding, including when taken together with all Permitted Refinancing other Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred of the Company and its Restricted Subsidiaries then outstanding and Incurred pursuant to this clause (1625), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, does not to exceed the greater of (i) $250.0 million or 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; andTotal Assets.
(17c) For purposes of determining compliance with this Section 4.09:
(1) all Indebtedness outstanding under the incurrence Credit Agreement on the Issue Date will be treated as Incurred under clause (1) of the immediately preceding paragraph;
(2) in the event that an item of Indebtedness (or issuanceany portion thereof) meets the criteria of more than one of the types of Indebtedness described above, the Company, in its 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 above clauses (provided that any Indebtedness originally classified as Incurred pursuant to any of clauses (2) through (25) of this Section 4.09(b) may later be reclassified as having been Incurred pursuant to the second preceding paragraph or any other of clauses (2) through (25) of this Section 4.09(b) to the extent that such reclassified Indebtedness could be Incurred pursuant to such second preceding paragraph or one of clauses (2) through (25) of this Section 4,09(b), as the case may be, by if it were Incurred at the time of such reclassification);
(3) the Company or will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described above; and
(4) with respect to Indebtedness permitted under clause (4) above in respect of Sale Leaseback Transactions that are not Capital Lease Obligations on the Issue Date, any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date reclassification of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) Sale Leaseback Transactions as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company Capital Lease Obligations shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right an Incurrence of payment to any other Indebtedness for purposes of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basisthis covenant.
(d) For purposes of determining compliance with this Section 4.11any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b)term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is entitled incurred to Refinance other Indebtedness denominated in a foreign currency, and such Refinancing would cause the applicable U.S. dollar denominated restriction to be incurred pursuant to Section 4.11(a), exceeded if calculated at the Company will be permitted to classify such item of Indebtedness relevant currency exchange rate in effect on the date of its incurrencesuch Refinancing, or later reclassify all or a portion such U.S. dollar denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such item Permitted Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced.
(e) The principal amount of any Indebtedness incurred to Refinance other Indebtedness, if incurred in any manner 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 complies with this Section 4.11. Indebtedness under Credit Facilities outstanding is in effect on the date on which Notes are first issued of such Refinancing.
(f) The Company will not, 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 interestnot permit any Guarantor to, the accretion directly or amortization of original issue discount, the payment of interest on indirectly incur any Indebtedness (including Permitted Indebtedness) that is subordinated or junior in the form right of additional payment to any 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company or such Guarantor, as accrued. Notwithstanding any the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or the applicable Note Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other provision Indebtedness of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary such Guarantor, as the case may incur pursuant to this Section 4.11 be; provided that (i) unsecured Indebtedness shall not be deemed treated as subordinated or junior to any other Indebtedness merely because it is unsecured and (ii) Indebtedness shall not be exceeded solely treated as subordinated or junior in right of payment to other Indebtedness merely because such Indebtedness has a result of fluctuations in exchange rates or currency valuesjunior priority with respect to any collateral.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, create, incur, issue, assume, guarantee Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, liable with respect to (or, collectively, “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 Subsidiary to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the may permit a Restricted Subsidiaries may Subsidiary to incur Indebtedness or issue preferred stockstock if, if at the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined time of such incurrence or issuance and after giving effect thereto on a pro forma basis Pro Forma Basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), the Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding such incurrence or issuance for which internal financial statements are available, taken as if the additional Indebtedness had one period, would have been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will least 2.0 to 1.0. The foregoing limitations shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):apply to:
(1) the incurrence by the Company 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 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 of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 3,260.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries issuance of the Existing IndebtednessNote Guarantees and the Guarantee by each Subsidiary Guarantor of the Company’s obligations under the 2030 Notes and the 2032 Notes on the date hereof;
(3) the incurrence by the Company and the Subsidiary Guarantors Restricted Subsidiaries of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureExisting 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 issuance of the purchase price or cost of designNotes, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets 2030 Notes and (ii) $20.0 million at any time outstandingthe 2032 Notes on the date hereof;
(5) the incurrence by the Company or any of its and the Restricted Subsidiaries of Permitted Capital Lease Obligations, mortgage financings and/or Indebtedness constituting purchase money obligations, including all Refinancing Indebtedness in exchange forincurred with respect thereto, or up to an aggregate at any one time outstanding of the net proceeds greater of which are used to extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtednessi) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a$250.0 million and (ii) or clause (2), (3), (4), (5), (16) or (17) 5.0% of this Section 4.11(b)Consolidated Total Assets as of any date of incurrence;
(6) the incurrence by the Company or any issuance of its Restricted Subsidiaries of intercompany Indebtedness or preferred stock between or among (i) the Company and any of its the 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 Subsidiaries 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)Subsidiaries;
(7) the issuance incurrence by any of the Company’s Restricted Subsidiaries to the Company or to any of its and the Restricted Subsidiaries of shares Hedging Obligations not for purposes 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)speculation;
(8) the incurrence by the Company or any of its and the Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of performance bonds, bankers’ acceptances, workers’ compensation claims; , surety, bid, appeal or similar bonds, completion guarantees, payment obligations in connection with self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements bank overdrafts (and, in all cases, and letters of credit in respect thereof) in the ordinary course of business;
(119) the incurrence by the Company and the Restricted Subsidiaries of Indebtedness consisting of “earn-out” obligations, Guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock;
(10) 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 (5) Business Days;
(11) the Guarantee by the Company or any Subsidiary Guarantor of Indebtedness of the Company or a Restricted Subsidiary and the Guarantee by any non-Guarantor Subsidiary of Indebtedness of another non-Guarantor Subsidiary, in each case, to the extent that the Guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.10; provided that if the Indebtedness being Guaranteed is contractually subordinated to the Notes or the Note Guarantees, as applicable, then the Guarantee must be subordinated to the same extent as the Indebtedness Guaranteed;
(12) the incurrence by Foreign the Company and the Restricted Subsidiaries of Refinancing Indebtedness issued in an aggregate principal amount at any time outstanding pursuant exchange for, or the proceeds of which are used to repay redeem, defease, extend, refinance, renew, replace or refund, Indebtedness (other than intercompany Indebtedness) referred to in clauses (2) through (5) above, this clause (12), including all Permitted Refinancing Indebtedness incurred ) or clause (13) below or that was otherwise permitted to refund, refinance, defease, renew, extend or replace Indebtedness be incurred pursuant to the test set forth in the first paragraph of this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionSection 4.10;
(13) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1613), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed $50.0 million;
(14) Acquired Debt and any other Indebtedness incurred to finance a merger, consolidation or other acquisition; provided that on a Pro Forma Basis, either (A) the Company’s Fixed Charge Coverage Ratio would be equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such merger, consolidation or other acquisition or (B) the Company would have been able to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of this Section 4.10;
(15) Indebtedness the net proceeds of which have been deposited in escrow to finance the repayment or redemption of such Indebtedness pursuant to customary escrow arrangements pending the release thereof;
(16) Indebtedness that has been discharged;
(17) Indebtedness deemed to exist pursuant to the terms of a Joint Venture agreement as a result of a failure of the Company or a Restricted Subsidiary to make a required capital contribution therein; provided that the only recourse on such Indebtedness is limited to the Company’s or such Restricted Subsidiary’s equity interests in the related Joint Venture;
(i) 5.0% Indebtedness representing deferred compensation to employees of Consolidated Net Tangible Assets the Company or any of its Restricted Subsidiaries incurred in the ordinary course of business, and (ii) $100.0 millionIndebtedness consisting of obligations of the Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with any Investment permitted under Section 4.9; and
(1719) the incurrence or issuance, as the case may be, by Indebtedness of the Company or any Restricted Subsidiary in an aggregate principal amount up to 100% of Acquired Debtthe Equity Proceeds received by the Company after 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, Acquired Preferred other than proceeds of Disqualified Stock or Acquired Disqualified Stock; provided sales of Equity Interests to the Company or any of its Subsidiaries) to the extent such Equity Proceeds have not been applied pursuant to clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to make Restricted Payments, and provided, that immediately any such Equity Proceeds shall be excluded for purposes of making Restricted Payments pursuant to any of clause (iii)(b) of the first paragraph of Section 4.9, or clause (2) or clause (9) of the second paragraph of Section 4.9, to the extent the Company or any Restricted Subsidiary incur Indebtedness in reliance thereon. Notwithstanding the foregoing, Restricted Subsidiaries that are non-Guarantor Subsidiaries will not be permitted to incur Indebtedness or issue preferred stock pursuant to the first paragraph of this Section 4.10 or clause (13) above if, after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date aggregate principal amount of Indebtedness of such incurrence Restricted Subsidiaries that are non-Guarantor Subsidiaries (excluding intercompany Indebtedness between or issuanceamong the Company and the Restricted Subsidiaries) outstanding pursuant to such first paragraph or such clause, determined on a pro forma basis together with the aggregate liquidation preference of preferred stock issued by such Restricted Subsidiaries that are non-Guarantor Subsidiaries (including a pro forma application of excluding intercompany preferred stock issued between or among the net proceeds therefromCompany and the Restricted Subsidiaries) as if outstanding pursuant to such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter periodprovisions, would be exceed the greater of (x) at least 2.0 to 1 or $1.25 billion and (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth 1.25x Adjusted EBITDA as of the Company would be greater than the Consolidated Net Worth any date of the Company immediately prior to such transaction.
(c) incurrence. The Company shall will not incur, and shall the Company will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or a Subsidiary Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.10, for the avoidance of doubt, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt permitted debt described in clauses (1) through (1719) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.10, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.10. Indebtedness under the Credit Facilities Agreement outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially at all times be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtabove. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.10; provided, in each such case, that the amount thereof is included in Fixed Charges the Consolidated Interest Expense of the Company as accrued. For purposes of determining compliance with any U.S. Dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar-equivalent principal amount of Indebtedness denominated in a currency other than U.S. Dollars will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease, or that is exchanged for, other Indebtedness denominated in a currency other than U.S. Dollars, and such extension, replacement, refunding, refinancing, renewal, defeasance or exchange would cause the applicable U.S. Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal, defeasance or exchange, 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 extended, replaced, refunded, refinanced, renewed, defeased or exchanged. Notwithstanding any other provision of this Section 4.114.10, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.10 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person. In connection with the incurrence of (i) revolving loan Indebtedness under this Section 4.10 or (ii) any commitment relating to the incurrence of Indebtedness under this Section 4.10 and (in respect of both (i) and (ii)) the granting of any Lien to secure any such Indebtedness, the Company or the applicable Restricted Subsidiary may designate, such incurrence and the granting of any such Lien as having occurred on the date of first incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and any related subsequent actual incurrence or granting of any such Lien therefor will be deemed for all purposes under this Indenture to have been incurred or granted on such Deemed Date, including, without limitation, for purposes of calculating the Fixed Charge Coverage Ratio and usage of any other baskets or ratios under this Indenture (as applicable). The amount of Indebtedness that may be incurred pursuant to any provision of this Section 4.10 or secured pursuant to Section 4.11 (i) shall be deemed to include all amounts necessary to renew, refund, redeem, refinance, replace, restructure, defease or discharge any such Indebtedness incurred and/or secured pursuant to such provisions, including after giving effect to additional Indebtedness in an amount equal to the aggregate amount of fees, premia, underwriting discounts and other costs and expenses incurred in connection with such renewal, refund, redemption, refinancing, replacement, restructuring, defeasance or discharge; and (ii) in any case where such amounts are or may be based on Consolidated Total Assets or Adjusted EBITDA (or any ratio of which Adjusted EBITDA is a component), shall not be deemed to be exceeded, with respect to such incurrence or grant of Lien, due solely to the result of fluctuations in the amount of Consolidated Total Assets or Adjusted EBITDA (and, for the avoidance of doubt, such Indebtedness and such Lien will be permitted to be refinanced or replaced notwithstanding that, after giving effect to such refinancing or replacement, such excess will continue).
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1 or, if a Timberlands Repurchase has occurred pursuant to and in accordance with the fourth paragraph of Section 4.10 hereof, 2.25 to 1, in either case determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or 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 4.11(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or and any Restricted Subsidiary Guarantor of additional Indebtedness under Credit Facilities and letters of credit under one or more 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 Subsidiaries thereunderface amount) not to exceed $1.51 billion less the greater aggregate amount of all Net Proceeds of Asset Sales that have been applied by the Company or any Restricted Subsidiary of the Company since the date of this Indenture to permanently repay Indebtedness under a Credit Facility pursuant to Section 4.10 hereof and less the amount of Indebtedness outstanding under clause (xviii) below; provided that the amount of Indebtedness permitted to be incurred pursuant to Credit Facilities in accordance with this clause (i) 30.0% of Consolidated Net Tangible Assets shall be in addition to any Indebtedness permitted to be incurred pursuant to Credit Facilities, in reliance on, and in accordance with, clauses (iv) and (xix) below or (ii) $600.0 millionin the first paragraph hereof;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amountamount (which amount may, but need not be, incurred in whole or in part under Credit Facilities), including all Permitted Refinancing Indebtedness incurred to refund, refinance refinance, replace, amend, restate, modify or replace renew, in whole or in part, any Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.07.5% of Consolidated Net Tangible Total Assets as of the date of incurrence and (ii) $20.0 50.0 million at 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 extend, refund, refinance, replace, amend, restate, modify or renew, defease in whole or replace in part, Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph hereof or clause clauses (2ii), (3iii), (4iv), (5), (16xv) or (17xix) of this Section 4.11(b)paragraph;
(6vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any Restricted Subsidiary of its Restricted Subsidiariesthe Company; 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case that each of the Company, or the 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 following 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 shares of preferred stock; provided, however, that:vi):
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Companythereof; and
(B) any sale or other transfer of any such preferred stock 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 issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)thereof;
(8) vii) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating or fixed rate Indebtedness that is permitted by the terms of this Indenture to be outstanding and the incurrence of Indebtedness under Other Hedging Agreements providing protection against fluctuations in currency values or in the ordinary course price of business energy, commodities and not for speculative purposesraw materials in connection with the Company's or any of its Restricted Subsidiaries' operations so long as management of the Company or such Restricted Subsidiary, as the case may be, has determined that the entering into of such Other Hedging Agreements are bona fide hedging activities;
(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 that was permitted to be incurred under by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10ix) the incurrence by the Company or any of its Restricted Company's Unrestricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; selfNon-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Recourse Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no if any such Indebtedness will ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to be contractually subordinated in right constitute an incurrence of payment to any other Indebtedness by a Restricted Subsidiary of the Company solely that was not permitted by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.this clause (ix);
(dx) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges and Consolidated Indebtedness of the Company as accrued. Notwithstanding any other provision of this Section 4.11, ;
(xi) the maximum amount incurrence by the Company of Indebtedness and the issuance by the Company of preferred stock, in each case, that is deemed to be incurred or issued, as the case may be, in connection with the Contribution;
(xii) the incurrence by the Company or any Guarantor of obligations pursuant to foreign currency agreements entered into in the ordinary course of business and not for speculative purposes;
(xiii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any 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 Company or any Restricted Subsidiary may incur pursuant (contingent obligations referred to this Section 4.11 shall in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be exceeded solely 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 Company and its Restricted Subsidiaries in connection with such disposition;
(xiv) the incurrence of obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;
(xv) the incurrence of Indebtedness by any Restricted Subsidiary in connection with the acquisition of assets or a new Restricted Subsidiary in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance, replace, amend, restate, modify or renew, in whole or in part, any Indebtedness incurred pursuant to this clause (xv), not to exceed $25.0 million at any one time outstanding; provided that such Indebtedness was incurred by the prior owner of such asset or such Restricted Subsidiary prior to such acquisition by the Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such acquisition by the Restricted Subsidiary;
(xvi) the incurrence of Indebtedness consisting of guarantees of loans made to management for the purpose of permitting management to purchase Equity Interests of the Company, in an amount not to exceed $7.5 million at any one time outstanding;
(xvii) Indebtedness of the Company that may be deemed to exist under the Contribution Agreement as a result of fluctuations the Company's obligation to pay purchase price adjustments; provided that the incurrence of Indebtedness to pay the purchase price adjustment shall be deemed to constitute an incurrence of Indebtedness that was not permitted by this clause (xvii);
(xviii) the incurrence of Indebtedness by a Receivables Subsidiary in exchange rates a Qualified Receivables Transaction that is not recourse to the Company or currency valuesany of its Subsidiaries (except for Standard Securitization Undertakings); provided that the aggregate principal amount of Indebtedness outstanding under this clause (xviii) and clause (i) above does not exceed $1.51 billion less the aggregate amount of all Net Proceeds of Asset Sales that have been applied by the Company or any Restricted Subsidiary of the Company since the date of this Indenture to permanently repay Indebtedness under a Credit Facility pursuant to Section 4.10 hereof; and
(xix) the incurrence by the Company of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) (which amount may, but need not be, incurred in whole or in part under the Credit Facilities) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance, replace, amend, restate, modify or renew, in whole or in part, any Indebtedness incurred pursuant to this clause (xix), not to exceed $75.0 million. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify or later reclassify such item of Indebtedness in any manner that complies with this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt.
Appears in 1 contract
Sources: Indenture (Pca Valdosta Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), 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 stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter four‑quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) in addition to Indebtedness incurred by the Company pursuant to clauses (2) through (15) below, the incurrence by the Company or any and its Restricted Subsidiary Subsidiaries 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) 30.0% of Consolidated Net Tangible Assets or (iiA) $600.0 million150.0 million and (B) the amount of the Borrowing Base;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant on the Issue Date and the Exchange Notes and the related Guarantees to this Supplemental Indenturebe issued under 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 (whether through the direct purchase of assets or usable the Capital Stock of any Person owning such assets) in a Permitted Businessthe business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 50.0 million outstanding at any time outstandingtime;
(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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause (2), (3), (4), (5), (1612) or (1713) of this Section 4.11(b4.09(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 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 applicable 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; , will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary normal course of business and not for speculative purposesbusiness;
(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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the such Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or any Notes Guarantee, then the such guarantee shall be subordinated or pari passu, as applicable, to the Notes or any Notes Guarantee, 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 performance bonds, bankers’ acceptances, workers’ compensation claims; self-insurance , surety or appeal bonds, payment obligations in connection with self‑insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bank overdrafts in the ordinary normal course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) Indebtedness of (A) the incurrence Company or any of its Restricted Subsidiaries incurred to finance an acquisition of (x) a Person that is merged, consolidated or amalgamated into the Company or a Restricted Subsidiary of the Company or that becomes a Restricted Subsidiary of the Company or (y) assets or (b) a Person that is acquired by Foreign Subsidiaries the Company or a Restricted Subsidiary of the Company or that is merged, consolidated or amalgamated into the Company or a Restricted Subsidiary of the Company (or any successor thereto after such merger, consolidation or amalgamation), including any Indebtedness incurred in an aggregate principal amount at any time outstanding contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Person was merged, consolidated or otherwise acquired by the Company or a Restricted Subsidiary of the Company; provided, however, that for incurrence of any such Indebtedness under this clause (12), including all Permitted Refinancing after giving pro forma effect thereto on the date of such acquisition, merger, consolidation or amalgamation, either (A) the Company would have been able to incur $1.00 of additional Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause Section 4.09(a) hereof or (12), not B) the Fixed Charge Coverage Ratio for the Company would be greater than the Fixed Charge Coverage Ratio for the Company immediately prior to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionsuch transaction;
(13) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness arising from agreements of the Company or such any Restricted Subsidiary providing for indemnification, adjustment of purchase price price, “earn out” or similar obligations, in each case, incurred in connection with the acquisition or disposition of any businessassets, assets or subsidiaryincluding shares of Capital Stock, other than guarantees in accordance with the terms 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionthis Indenture;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1614), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(1715) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or issuancedischarge any Indebtedness incurred pursuant to this clause (15), as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect not to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) exceed $150.0 million. The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor Guarantor, unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1715) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in as Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 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 shall be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person. Notwithstanding the foregoing, (i) all Indebtedness of the Company outstanding on the Issue Date shall be permitted and (ii) the Company shall be permitted to issue shares of the Company common stock.
Appears in 1 contract
Sources: Indenture (Titan International Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or 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 4.11(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities (and the guarantee thereof by the Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) 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 then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $2,000.0 million less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets or (ii) $600.0 millionAsset Sales applied to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by $1.0 billion in aggregate principal amount of each of the Notes and the related Exchange Notes and the Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethereof;
(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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.05% of the Consolidated Net Tangible Assets and (ii) $20.0 million of the Company at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $250.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinancerefinance or replace, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) (other than intercompany Indebtedness or Indebtedness incurred pursuant to clause (2), (3), (4), (5), (16i) or (17) of this Section 4.11(babove);
(6vii) 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 in respect of workers' compensation claims 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;
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any 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 Company or any Restricted Subsidiary (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 (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 Company and its Restricted Subsidiaries in connection with such disposition;
(ix) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; andNotes and (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 one of its Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its 49 Restricted Subsidiary of the Company will Subsidiaries 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);
(7x) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any Restricted Subsidiary of Hedging Obligations that are incurred for the purpose of (A) fixing, hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries of Hedging Obligations against changes in the ordinary course of business and not for speculative purposescurrency exchange rates;
(9xi) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10xii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16xiv) 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 then outstanding incurred to extend, refund, refinance, renew, defease refinance or replace any other Indebtedness incurred pursuant to this clause (16xiv), and not to exceed $200.0 million; and
(xv) the issuance incurrence by the Company Foreign Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any Disqualified Stock and by time outstanding, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any Restricted Subsidiary of any additional preferred stockother Indebtedness incurred pursuant to this clause (xv), not to exceed the greater of (ia) 5.05% of such Foreign Subsidiaries' Consolidated Net Tangible Assets and or (iib) $100.0 250.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xv) of Section 4.11(b), above or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to classify shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11covenant. Indebtedness under Credit Facilities outstanding on the date on which 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 Accrual of interest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values4.09.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been Consolidated Leverage Ratio at least 2.0 to 1the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or preferred stock, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, after giving pro forma effect to such incurrence or issuance as of such date and to the applicable transaction related thereto), use of proceeds therefrom as if the additional Indebtedness same had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, occurred at the beginning of such four-quarter periodthe most recently ended two full fiscal quarters of the Company for which internal financial statements are available, would have been no greater than 5.5 to 1.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any Restricted Subsidiary Guarantor of Indebtedness and letters of credit additional Indebtedness, including under one or more the Credit Facilities Agreement, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 US$50.0 million;
(2) the incurrence by the Company and any Guarantor of Indebtedness in an aggregate principal amount at any one time outstanding under this clause (2) of up to 200% of Total Incremental Equity; provided that the total amount of Indebtedness outstanding at any one time under this clause (2) may not exceed US$50.0 million; provided further that the amount of any such net cash proceeds that are utilized for purposes of incurring Indebtedness under this clause (2) will be excluded from clause (3)(B) of Section 4.07(a).
(3) the incurrence by the Company and any Guarantor of Indebtedness that is contractually subordinated in right of payment to the Notes;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness, incurred for the purpose of financing all or any part of the purchase price or cost of inventory used in the business of the Company or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), not to exceed US$5.0 million at any time outstanding;
(5) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(36) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the date of this Indenture and continued to be represented by the exchange Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(47) 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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (47), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 US$5.0 million at any time outstanding;
(5) 8) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph of this covenant or clause (2), (3), clauses (4), (5), (166), (7) or (1715) of this Section 4.11(b)paragraph;
(69) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the 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 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 (69);
(710) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(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 (710);
(8) 11) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(912) 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 that was permitted to be incurred by another provision of this Section 4.11covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee 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 or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appeal, bid completion, guarantee and performance or surety bonds; bonds or similar requirements (and, in all cases, letters of credit in respect thereof) other reimbursement obligations in the ordinary course of business;
(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;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(1615) 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 extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of extent the net proceeds therefrom) thereof are promptly deposited to defease all outstanding Notes as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) described in Article 8 hereof. The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1715) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09, including by allocation to more than one other type of Indebtedness. Other Indebtedness under Credit Facilities ranking equal in right of payment with the Notes outstanding on the date on which 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 outstanding principal amount of interestany particular Indebtedness shall be counted only once and any obligations arising under any Guarantee, the accretion Lien, letter of credit or amortization of original issue discount, the payment of interest on any similar instrument supporting such 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 shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrueddouble counted. Notwithstanding any other provision of this Section 4.114.09(b), the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09(b) shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, and the net proceeds therefrom applied, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):following:
(1) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 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 (a) the greater of (i) 30.0$25.0 million and (ii) 7.5% of Consolidated Net Tangible Assets Assets, less (b) the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or (ii) $600.0 millionany 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(b)(1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, Financing 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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.07.5% of Consolidated Net Tangible Assets and of the Company (iimeasured as of the date of the applicable incurrence) $20.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of Attributable Debt in respect of Sale/Leaseback Transactions, in an aggregate principal amount not to exceed the greater of (a) $25.0 million and (b) the minimum amount that would cause the Consolidated Secured Leverage Ratio of the Company to be greater than 4.75 to 1.00 as of the date of such Sale/Leaseback Transaction; provided, however, that in no event will the aggregate principal amount of Attributable Debt in respect of Sale/Leaseback Transactions outstanding pursuant to this clause (5), as of the date of any Sale/Leaseback Transaction entered into pursuant to this clause (5), exceed $75.0 million;
(6) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) the first paragraph of this covenant or clause clauses (2), (3), (4), (56), (1613) or (1720) of this Section 4.11(b4.09(b);
(67) 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) (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 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 (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) 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);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not (excluding Hedging Obligations entered into for speculative purposes);
(910) 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 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall 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 in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; , or performance, appealsurety, bid completion, guarantee and surety bonds; statutory or similar requirements (and, in all cases, letters of credit in respect thereof) appeal bonds 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 within five Business Days;
(1213) the incurrence by Foreign the Company or any of its Restricted Subsidiaries of Indebtedness Acquired Debt (other than Acquired Debt incurred in an aggregate principal amount at connection with, or to provide all or any time outstanding pursuant portion of the funds or credit support utilized to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend consummate the transaction or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater series of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) transactions which results in the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 acquisitionAcquired Debt); provided that on the maximum aggregate liability in respect date of all such Indebtedness shall at no time exceed the gross proceeds actually received by incurrence of Acquired Debt and after giving pro forma effect thereto, either (a) the Company would have been able 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 for the Company would be equal to or greater than the Fixed Charge Coverage Ratio for the Company immediately prior to such Restricted Subsidiary in connection with such dispositiontransaction or series of transactions);
(14) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness consisting owed on a short-term basis of take-or-pay obligations contained in supply agreements entered into no longer than 30 days to banks and other financial institutions incurred in the ordinary course of businessbusiness with such banks and financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Company and its Restricted Subsidiaries;
(15) the incurrence by the Company of Indebtedness to or any of its Restricted Subsidiaries of Indebtedness consisting of (a) the financing of insurance premiums or (b) take-or-pay obligations contained in supply arrangements, in each case, incurred in connection with the purchase ordinary course of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; andbusiness;
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness representing deferred compensation to employees of the Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(17) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities, and reinvestment obligations related thereto, incurred in the ordinary course of business;
(18) the incurrence by the Company or any of its Restricted Subsidiaries of Guarantees 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 not Affiliates of the Company or any of its Restricted Subsidiaries;
(19) the incurrence by the Company or any of its Restricted Subsidiaries of 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; and
(20) the incurrence by the Company or any Guarantor of Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1620), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (ia) 5.0$25.0 million and (b) 7.5% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, determined as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such the applicable incurrence or issuancepursuant to this clause (20)), determined on a pro forma basis (including a pro forma application the items of Indebtedness and, in the net proceeds therefromcase of clause (8), preferred stock, specified in clauses (1)-(20) above are collectively referred to as if such Acquired “Permitted Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) ”). The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1720) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness (other than the Notes and the Note Guarantees) under Credit Facilities outstanding on the date on which 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 interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Carmike Cinemas Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness or issue 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-the four fiscal quarter period.
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any Restricted Subsidiary of the Company 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 (ia) 30.0% of Consolidated Net Tangible Assets $200.0 million or (iib) $600.0 millionthe amount of the Borrowing Base as of the date of such incurrence, less, in the case of clause (a) above, 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 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 Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe 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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount (or accreted value, as applicable) at any time outstanding pursuant to this clause (4), including all Permitted Refinancing Indebtedness incurred to refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extend, refund, refinance, renewreplace, defease or replace discharge Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) or clause clauses (2), (3), (4), (5), (1612) or (1713) of this Section 4.11(b4.09(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; and
(B) (i) any subsequent issuance or transfer (other than a pledge to secure Indebtedness that is otherwise permitted by this Indenture) 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 (other than a pledge to secure Indebtedness that is otherwise permitted under this Indenture) to a Person that is not either the Company or a Restricted Subsidiary of the Company Guarantor; 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 (6);
(7) the issuance by any of the Company’s 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer (other than a pledge to secure Indebtedness that is otherwise permitted by this Indenture) 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 (other than a pledge to secure Indebtedness that is otherwise permitted by this Indenture) 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 in the ordinary course of business and not for speculative purposesbusiness;
(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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of IRBs, workers’ ' compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ ' acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiary, other than guarantees Capital Stock of Indebtedness incurred by any Person acquiring all or any portion a Restricted Subsidiary of such business, assets or subsidiary for the purpose of financing such acquisitionCompany; 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 or such and its Restricted Subsidiary in connection with such disposition;
(1413) the incurrence by the Company or a any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with under a Receivable FacilityBack-to-Back Loan; and
(1614) 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 outstandingoutstanding pursuant to this clause (14), including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1614), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1714) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a4.09(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under of this Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on the exception exemption provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Consolidated Interest Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary of the Company may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors (other than Capital and its Foreign 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 of Capital (prior to the Migration) or the Company (after the Migration), as the case may be, for which internal consolidated financial statements are available in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor (other than Capital and its Foreign Subsidiaries) 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 $160.0 million less the greater 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 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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) provided that up to $600.0 million15.0 million in aggregate principal amount under the Credit Facilities may be incurred by Capital and its Foreign Subsidiaries);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenturethe 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 assets used in the business of the Company or equipment used or usable in a Permitted Businessany of its Restricted Subsidiaries and related financing costs, in an aggregate principal amount, including all Permitted Refinancing Indebtedness refinancings incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 15.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), ) and (5), (16) or (17) of this Section 4.11(b4.09(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 GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the 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 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 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will Company shall 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 in the ordinary course of business and not entered into 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 that was permitted to be incurred by another provision of this Section 4.114.09(b); provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”; with “incurrence” having a correlative meaning) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or and issue Disqualified Stock Stock, and the Company’s Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt) and 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Notwithstanding the foregoing, the provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following (the items of Indebtedness described below in this paragraph (collectively, b) being referred to collectively as “Permitted Debt”):
(1) the incurrence by the Company or and 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 $175.0 million; provided, that the greater 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 (i) 30.0% such additional Indebtedness is permitted pursuant to any of Consolidated Net Tangible Assets or (ii) $600.0 millionthe other provisions of this Section 4.09;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the Issue Date and the Exchange Securities and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by the Company or any Restricted Subsidiary of its Restricted Subsidiaries the Company 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, deployment, refurbishment, modification or improvement lease of property, plant or equipment or furniture, fixtures and equipment, in each case used in the business of the Company or usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (16) or (17) of this Section 4.11(b4.09(b);
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among owing to and held by the Company and or 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; and
(B) (ia) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and 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 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 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 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 in the ordinary course of business and not for speculative purposesObligations;
(9) the guarantee incurrence of a Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesSubordinated Indebtedness, then the guarantee Guarantee shall be subordinated to the same extent as the contractual subordination applicable to 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 or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appealperformance bonds, completion bonds, bid completionbonds, guarantee appeal bonds and surety bonds; bonds or other similar requirements (andbonds or obligations, in all cases, and any Guarantees or letters of credit in respect thereof) in functioning as or supporting any of 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 Days;
(12) the incurrence by Foreign the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in an aggregate principal amount at any time outstanding pursuant to this clause (12)the ordinary course of business; provided that, including all Permitted Refinancing Indebtedness incurred to refundupon the drawing of such letters of credit or the incurrence of such Indebtedness, refinance, defease, renew, extend such obligations are reimbursed within one year following such drawing or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionincurrence;
(13) the incurrence by the Company of Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or a to satisfy and discharge the Notes;
(14) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiary Subsidiaries in the ordinary course of business;
(15) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements of the Company or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiary, other than guarantees Capital Stock of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisitiona 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 or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;
(1416) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable FacilityPermitted Acquisition Indebtedness; and
(1617) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1617), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (ia) 5.0$10.0 million or (b) 5% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) Tangible Assets. For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles and the payment of dividends on Disqualified Stock 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 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such asset at the date of determination; and
(b) the amount of the Indebtedness of the other Person; and
(3) the principal amount of the Indebtedness, in the case of any other Indebtedness.
Appears in 1 contract
Sources: Indenture (Wca Waste Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) incur any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockPreferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness (including Acquired Debt) or issue preferred stockPreferred Stock, if the Fixed Charge Coverage Consolidated Leverage Ratio for of the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 , would have been at least 2.0 no more than 1.1 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom andtherefrom) after giving effect to such incurrence; provided further that any Indebtedness incurred pursuant to this Section 4.09(a) shall be (i) incurred pursuant to a reserve-based credit facility with lenders that include commercial banks that engage in oil and gas reserve based lending in the ordinary course of business, (ii) subordinated in right of payment to the Notes or (iii) incurred or assumed in connection with an acquisition of assets or Equity Interests or an Investment (provided that, in the case of Acquired DebtIndebtedness incurred (but not assumed (so long as such assumed Indebtedness was not incurred in contemplation of such acquisition or Investment)) in connection with an acquisition or Investment, giving pro forma effect such Indebtedness (A) has a final maturity date 180 days or more after the final maturity date of the Notes and (B) shall not be subject to scheduled amortization prior to maturity); provided further that, with respect to any incurrence under this Section 4.09(a) after the Issue Date, the Company shall have delivered to the applicable transaction related thereto)Trustee an Officer’s Certificate signed by the chief financial officer of the Company certifying that the requirements of this Section 4.09(a) have been complied with (including reasonably detailed calculations thereof) in connection with any such incurrence or issuance. Upon (i) the request of any Holder of 10% or more of the outstanding principal amount of the Notes (which request shall be in writing) and (ii) delivery by such Holder to the Trustee and the Company of a certificate in form and substance substantially the same as Exhibit E attached hereto, as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning Trustee shall deliver a copy of such four-quarter periodOfficer’s Certificate to such Holder.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness or issuances of Disqualified Stock or Preferred Stock, as applicable (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any and its 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 Subsidiaries of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionExisting Indebtedness;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the Issue Date and the related Guarantees to be issued pursuant to this Supplemental IndentureNote Guarantees;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (ia) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 (substantially concurrently with the incurrence of such Permitted Refinancing Indebtedness) solely to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company or any Preferred Stock of a Restricted Subsidiary, in each case that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) or clause clauses (21), (3), (4), (5), (162) or (173) of this Section 4.11(b4.09(b) and (b) Senior Debt in exchange for, or the net proceeds of which are used (substantially concurrently with the incurrence of such Permitted Refinancing Indebtedness) solely to renew, refund, refinance, defease or discharge any Senior Debt of the Company or any of its Restricted Subsidiaries provided that the aggregate principal amount (or, if greater, commitments in respect thereof) of such Indebtedness does not exceed the sum of (i) the outstanding principal amount of such Senior Debt (including any Reserved Indebtedness Amount) and (ii) an amount necessary to pay any fees and expenses, including any premiums, related to such renewal, refunding, refinancing, defeasance or discharge; provided that, in the case of this clause (b), if the Senior Debt being renewed, refunded, refinanced, replaced, defeased or discharged is revolving Indebtedness, the commitments in respect thereof are permanently reduced in an amount equal to the principal amount (or, if greater, the amount of commitments in respect thereof) such Senior Debt incurred pursuant to this clause (b);
(64) 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 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 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 (64);
(75) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stockany 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 (75);
(8) 6) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(97) 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 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) 8) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance obligations or similar obligations; the financing of insurance premiums; bankers’ acceptances; performancebid, plugging and abandonment, appeal, bid completionreimbursement, guarantee performance, surety and surety bonds; similar bonds and completion guarantees provided by the Company or similar requirements (and, in all cases, letters of credit in respect thereof) a Restricted Subsidiary in the ordinary course of businessbusiness or consistent with industry practice or past practice and any Guarantees or letters of credit functioning as or supporting any of the foregoing bonds or obligations and workers’ compensation claims in the ordinary course of business or consistent with industry practice or past practice;
(119) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(1310) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness in- kind obligations relating to net oil, natural gas liquid or natural gas balancing positions arising in the ordinary course of business;
(11) any obligation arising from agreements of the Company or such any Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price price, earn outs, or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or subsidiary, other than guarantees Capital Stock 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 shall at no time exceed the gross proceeds actually received by the Company or such a Restricted Subsidiary in connection with such disposition;
(14) the incurrence a transaction permitted by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilitythis Indenture; and
(1612) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness Indebtedness, the issuance by the Company of any Disqualified Stock or the issuance by any Restricted Subsidiary of Preferred Stock in an aggregate principal amount (or accreted value, as applicable) or liquidation preference, not to exceed, at any one time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed 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 (1712) of Section 4.11(b)above, or is entitled to be incurred or issued pursuant to Section 4.11(a4.09(a), the Company 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 4.114.09. Indebtedness under Commitments in respect of the Credit Facilities outstanding Agreement in effect on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have been incurred on such date in reliance on upon the exception provided by clause (1) proviso to the first paragraph of the definition of Permitted DebtConsolidated Leverage Ratio until such commitments are no longer outstanding or until the Company revokes an election of a Reserved Indebtedness Amount with respect to such commitments. The accrual of interestinterest or Preferred Stock or Disqualified Stock dividends or distributions, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of Preferred Stock or Disqualified Stock as Indebtedness due to a change in accounting principles, and the payment of dividends or distributions on Preferred Stock or Disqualified Stock in the form of additional shares 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 4.11; provided4.09. The amount of any Indebtedness outstanding as of any date will be:
(a) the accreted value of the Indebtedness, in each 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 case, that assets at the date of determination; and
(2) the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any Indebtedness of the other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency valuesPerson.
Appears in 1 contract
Sources: Indenture (HighPeak Energy, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company and the Guarantors shall not, and shall not permit any of its the Restricted Subsidiaries to, directly 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 shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and or preferred stock if the Restricted Subsidiaries may incur Company's Leverage Ratio at the time of incurrence of such Indebtedness or issue the issuance of such Disqualified Stock or such preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which internal financial statements are available, would have been no greater than (i) 7.0 to 1, if such four-quarter period.
incurrence or issuance is on or prior to April 1, 2003, and (bii) 6.5 to 1, if such incurrence or issuance is April 1, 2003. The provisions of the first paragraph of this Section 4.11(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any the Restricted Subsidiary Subsidiaries of Indebtedness and letters of credit under one or more the Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) Agreements (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 and related Guarantees under the greater Credit Agreements; provided that the aggregate principal amount of (i) 30.0% all Indebtedness of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued Restricted Subsidiaries then classified as having been incurred pursuant to this Supplemental Indenture;
clause (4i) 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 or usable in a Permitted Business, in an aggregate principal amountafter giving effect to such incurrence, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% does not exceed an amount equal to $225.0 million less the aggregate amount applied by the Company and the Restricted Subsidiaries to permanently reduce the availability of Consolidated Net Tangible Assets and Indebtedness under the Credit Agreements pursuant to Section 4.10;
(ii) $20.0 million at any time outstandingthe incurrence by the Company and the Restricted Subsidiaries of Existing Indebtedness;
(5iii) the incurrence by the Company of Indebtedness represented by the Notes in accordance with the terms of this Indenture;
(iv) 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(6v) the incurrence by the Company or any of its the Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its the Restricted Subsidiaries; provided, however, that:
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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a Subsidiary Guarantor; and
(B) (ix) any subsequent event or 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 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 (6v);
(7vi) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its the Restricted Subsidiaries of Hedging Obligations that are incurred in the ordinary course of business for the 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;
(9vii) the guarantee Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of any of the Company or a Restricted Subsidiaries so long as the incurrence of such Indebtedness by such Restricted Subsidiary of the Company that was is permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedcovenant;
(10viii) the incurrence Guarantee by any Restricted Subsidiary of Indebtedness of the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of businessGuarantor;
(11ix) the incurrence by the Company or any Indebtedness consisting of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for customary indemnification, adjustment adjustments of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition acquisition of any business, assets business or subsidiary, other than guarantees of assets;
(x) Indebtedness incurred by any Person acquiring all the Company or any portion of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation to letters of credit in respect to workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims; provided, however, that upon the drawing of such businessletters of credit or the incurrence of such Indebtedness, assets such obligations are reimbursed within 30 days following such drawing or subsidiary incurrence;
(xi) Indebtedness of the Company and the Restricted Subsidiaries represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment whether through the direct purchase of assets or at least a majority of the Voting Stock of any person owning such acquisition; provided that the maximum assets, in an aggregate liability principal amount not to exceed $5.0 million at any time outstanding;
(xii) Obligations in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received performance and surety bonds and completion Guarantees provided by the Company or such any Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15xiii) Acquisition Debt of the incurrence Company or a Restricted Subsidiary if (w) such Acquisition Debt is incurred within 270 days after the date on which the related definitive acquisition agreement or LMA, as the case may be, was entered into by the Company or such Restricted Subsidiary, (x) the aggregate principal amount of Indebtedness such Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from the Company to any the Trustee (an "Incurrence Notice") within ten days after the date on which the related definitive acquisition agreement or LMA, as the case may be, was entered into by the Company or such Restricted Subsidiary, which notice shall be executed on the Company's behalf by the chief financial officer of its Subsidiaries the Company in such capacity and shall describe in reasonable detail the acquisition or LMA, as the case may be, which such Acquisition Debt shall be incurred to finance, (y) after giving pro forma effect to the acquisition or LMA, as the case may be, described in such Incurrence Notice, the Company or such Restricted Subsidiary could have incurred such Acquisition Debt under this Indenture as of the date upon which the Company delivers such Incurrence Notice to the Trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition or LMA, as the case may be, described in such Incurrence Notice (including to repay or refinance indebtedness or other obligations incurred in connection with such acquisition or LMA, as the purchase of accounts receivable case may be, and to pay related assets fees and expenses);
(xiv) Guarantees by the Company from or any such Restricted Subsidiary which assets are subsequently conveyed by of Indebtedness of officers of the Company in connection with a Receivable Facilityan aggregate principal amount not to exceed $3.0 million at any time outstanding; and
(16xv) the incurrence by the Company or any of its the Restricted Subsidiaries of additional Indebtedness Indebtedness, including Attributable Debt incurred after the date of this Indenture, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any other Indebtedness incurred pursuant to this clause (16xv), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 10.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xv) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.114.09. In addition, the Company may, at any time, change the classification of an item of Indebtedness, or any portion thereof, to any other clause or to the first paragraph of this Section 4.09, provided that the Company or a Restricted Subsidiary would be permitted to incur the item of Indebtedness, or portion of the item of Indebtedness, under the other clause or the first paragraph of this Section 4.09, as the case may be, at the time of reclassification. Accrual of interest, accretion or amortization of original issue discount and the accretion of accreted value shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09. Indebtedness under Credit Facilities Agreements outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause (1i) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Nexstar Broadcasting of the Wichita Falls LLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Restricted Company's Subsidiaries may incur Indebtedness or issue shares of preferred stock if the Company's Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or such preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which financial statements have been filed with the SEC, would have been no greater than (a) 6.0 to 1, if such four-quarter period.
incurrence or issuance is on or prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇, (b▇) 5.75 to 1, if such incurrence or issuance is on or prior to March 31, 2000 and after March 31, 1999, and (c) 5.5 to 1, if such incurrence or issuance is after March 31, 2000. The Company shall not incur any Indebtedness 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 Company 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. The provisions of the first paragraph of this Section 4.11(a) 4.09 will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any and its Restricted Subsidiary Subsidiaries of additional term Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under not to exceed $275.0 million less the aggregate amount of all mandatory or scheduled repayments of the principal of any such additional term Indebtedness (other than repayments that are immediately reborrowed) that have actually been made since the date of this clause Indenture;
(1ii) the incurrence by the Company and its Restricted Subsidiaries of additional revolving credit Indebtedness and letters of credit pursuant to Credit Facilities in an aggregate principal amount (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) at any one time outstanding not to exceed the greater Specified Amount as of (i) 30.0% such date of Consolidated Net Tangible Assets or incurrence; provided that, that the aggregate principal amount of all Indebtedness incurred pursuant to this clause (ii) is reduced to an outstanding balance of $600.0 million1.0 million or less for at least 30 consecutive days in each fiscal year;
(2iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iv) the incurrence by the Company and the Subsidiary Guarantors SFEC of Indebtedness represented by the Company Notes and the related Guarantees to be issued pursuant to this Supplemental IndentureNew SFEC Notes;
(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, 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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), amount not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 25.0 million at any time outstanding;
(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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany IndebtednessIndebtedness and Indebtedness incurred pursuant to clauses (i) and (ii) above) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b)incurred;
(6vii) 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 Subsidiary Guarantor is the obligor on any such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; and
Company 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 (6vii);
(7viii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of (a) Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be incurred and (b) Currency Agreements that do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding at any time other than as a result of fluctuations in foreign currency exchange rates or interest rates or by reason of fees, indemnities and compensation payable thereunder;
(ix) Indebtedness in respect of performance bonds, letters of credits, surety or appeal bonds, prior to any drawing thereunder, for or in connection with pledges, deposits or payments made or given in the ordinary course of business and not for speculative purposesbusiness;
(9x) the guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if 4.09 (including, without limiting the Indebtedness being guaranteed is subordinated to or pari passu with generality of the Notesforgoing, then the guarantee shall be subordinated to by any Restricted Subsidiary of the same extent as Company of Existing Indebtedness and the Indebtedness guaranteedguarantee by the Company of the New SFEC Notes);
(10xi) 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 workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performancean Unrestricted Subsidiary, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the such event shall be deemed to constitute an incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or subsidiary, other than guarantees of Indebtedness incurred that was not permitted 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
this clause (14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityxi); and
(16xii) 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 extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (16xii), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xii) of Section 4.11(b), above or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to shall, in its sole discretion, classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09 and such item of Indebtedness will be treated as having been incurred pursuant to one or more of such clauses and/or pursuant to the first paragraph hereof, as the Company shall specify. Indebtedness under Credit Facilities outstanding In connection with the Six Flags Acquisition and the Offerings occurring on the date of this Indenture, the Company shall be permitted to incur a portion of the Indebtedness to be incurred on which Notes are that date pursuant to the Debt to Cash Flow Ratio set forth in the first issued and authenticated under paragraph of this Supplemental Indenture will initially be deemed Section 4.09 to have been the extent permitted by such Debt to Cash Flow Ratio calculated without regard to any Permitted Debt incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debtdate. The accrual 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 preferred stock in the form of additional shares of the same class of Disqualified Stock preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock preferred stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof is included in Fixed Charges Consolidated Indebtedness of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Premier Parks Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any ----- Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired DebtIndebtedness) or the Company may issue shares of Disqualified Stock if:
(i) no Default or Event of Default shall have occurred and be continuing at the Restricted Subsidiaries may incur time or as a consequence of the incurrence of any such Indebtedness or issue preferred stock, if the issuance of any such Disqualified Stock; and
(ii) the Consolidated Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 11.0, determined on a pro forma basis (including a the pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such fourFour-quarter periodQuarter Period.
(b) The provisions of paragraph (a) of this Section 4.11(a) 4.04 will not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”):Indebtedness"): ----------------------
(1i) the incurrence by Notes (other than Additional Notes) and the Company or any Restricted Subsidiary Note Guarantees (other than in respect of Additional Notes) in an aggregate principal amount not to exceed $140.0 million;
(ii) Indebtedness and letters of credit under one or more incurred pursuant to 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 Subsidiaries thereunder) not to exceed $20.0 million; provided that the greater amount of (i) 30.0% of Consolidated Net Tangible Assets or Indebtedness permitted to be incurred pursuant to the Senior Credit Facility in accordance with this clause (ii) $600.0 millionshall be in addition to any Indebtedness permitted to be incurred pursuant to the Senior Credit Facility in reliance on, and in accordance with, clauses (vii), (ix) and (xv) below or pursuant to paragraph (a) above;
(2iii) the incurrence by other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date for so long as such Indebtedness remains outstanding;
(iv) Interest Swap Obligations of the Existing Company covering Indebtedness of the Company; provided that any Indebtedness to which any such Interest Swap Obligations correspond is otherwise permitted to be incurred under this Indenture; and provided, further, that such Interest Swap Obligations are entered into, in the judgment of the Company, to protect the Company from fluctuation in interest rates on its outstanding Indebtedness;
(3v) the incurrence by Indebtedness of the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indentureunder Currency Agreements;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(b);
(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 (A) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; and
Notes 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or with respect to any of its Restricted Subsidiaries of shares of preferred stock; providedincurrence prior to February 28, however2001, 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 Indebtedness incurred by the Company or any of its Restricted Subsidiaries that is a Guarantor to consummate an Asset Acquisition of Hedging Obligations in the ordinary course of business and not for speculative purposes;
a Person engaged in, or assets consisting of, a Permitted Business or (9B) the guarantee incurrence of Acquired Indebtedness by the Company or any of its Restricted Subsidiaries in respect of a Person engaged in a Permitted Business, in the aggregate principal amount for (A) and (B) above not to exceed $15.0 million, in each case so long as immediately after giving effect to such incurrence on a pro forma basis, the Company would have had a Consolidated Fixed Charge Coverage Ratio that is not less than the Consolidated Fixed Charge Coverage Ratio of the Company immediately prior to such incurrence; provided that in no event shall the Company's Consolidated Fixed Charge Coverage Ratio immediately after giving effect to such incurrence on a pro forma basis be less than the Company's Consolidated Fixed Charge Coverage Ratio on the Issue Date; provided, however, that if the Consolidated EBITDA relating to any such Asset Acquisition for the most recently ended four fiscal quarters prior to the consummation of such Asset Acquisition is in excess of $8.0 million of Consolidated EBITDA and the Company's Consolidated Fixed Charge Coverage Ratio immediately after giving effect to such incurrence on a pro forma basis would have been greater than 1.8 to 1.0, then the $15.0 million limitation above shall not apply to such incurrence (it being understood that for purposes of calculating the Consolidated Fixed Charge Coverage Ratio for purposes of this clause (vii) only, Pro Forma Cost Savings shall only mean those cost savings that are directly attributable to such Asset Acquisition and that are calculated on a basis that is consistent with Regulation S-X under the Securities Act);
(viii) Guarantees by the Company and the Guarantors of each other's Indebtedness; provided that such Indebtedness is permitted to be incurred under this Indenture;
(ix) Indebtedness (including Capital Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries 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) in an aggregate principal amount outstanding not to exceed the greater of (A) $5.0 million or (B) 10% of Total Tangible Assets at the time of any incurrence thereof (including any Refinancing Indebtedness with respect thereto) (which amount may, but need not, be incurred in whole or in part under the Senior Credit Facility);
(x) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers' compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;
(xi) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price price, earn out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiarya Restricted Subsidiary of the Company, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;
(14xii) the incurrence obligations in respect of performance and surety bonds and completion guarantees provided by the Company or a any Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into the Company in the ordinary course of business;
(15xiii) any refinancing, modification, replacement, renewal, restatement, refunding, deferral, extension, substitution, supplement, reissuance or resale (collectively, "Refinancings" and the incurrence term ------------ "Refinanced" shall have a correlative meaning) of existing or future ---------- Indebtedness (other than Indebtedness incurred pursuant to clauses (ii), (iv), (v), (vi), (viii), (ix), (x), (xi), (xii), (xiv) and (xv) of this paragraph (b)), including any additional Indebtedness incurred to pay interest or premiums required by the Company instruments governing such existing or future Indebtedness as in effect at the time of Indebtedness to any of its Subsidiaries incurred issuance thereof ("Required -------- Premiums") and fees in connection with therewith ("Refinancing Indebtedness"); -------- ------------------------ provided that any such event shall not:
(1) directly or indirectly result in an increase in the purchase aggregate principal amount of accounts receivable Permitted Indebtedness (except to the extent such increase is a result of a simultaneous incurrence of additional Indebtedness (A) to pay Required Premiums and related assets by fees or (B) otherwise permitted to be incurred under this Indenture) of the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilityand its Restricted Subsidiaries; and
(162) the incurrence by the Company or any of its Restricted Subsidiaries of additional create Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred with a Weighted Average Life to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued Maturity at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless time such Indebtedness is also contractually subordinated in right incurred that is less than the Weighted Average Life to Maturity at such time of payment to the Notes and the applicable Guarantee on substantially identical termsIndebtedness being refinanced, modified, replaced, renewed, restated, refunded, deferred, extended, substituted, supplemented, reissued or resold; provided, further, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.that
Appears in 1 contract
Sources: Indenture (Bedding Experts Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or 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 4.11(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities (and the guarantee thereof by the Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) 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 then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $375.0 million less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets or (ii) $600.0 millionAsset Sales applied since December 11, 1998 to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by $500.0 million in aggregate principal amount of the Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethereof in exchange for the Bridge Loans;
(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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 30.0 million at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinancerefinance or replace, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) (other than intercompany Indebtedness or Indebtedness incurred pursuant to clause (2), (3), (4), (5), (16i) or (17) of this Section 4.11(babove);
(6vii) 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 in respect of workers' compensation claims 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;
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any 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 Company or any Restricted Subsidiary (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 (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 Company and its Restricted Subsidiaries in connection with such disposition;
(ix) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; and
Notes 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 one of its Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its Restricted Subsidiary of the Company will Subsidiaries 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);
(7x) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of (A) fixing, hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries of Hedging Obligations against changes in the ordinary course of business and not for speculative purposescurrency exchange rates;
(9xi) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10xii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16xiv) 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 then outstanding incurred to extend, refund, refinance, renew, defease refinance or replace any other Indebtedness incurred pursuant to this clause (16xiv), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xiv) of Section 4.11(b), above or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to classify shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11covenant. Indebtedness under Credit Facilities outstanding on the date on which 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 Accrual of interest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values4.09.
Appears in 1 contract
Sources: Indenture (L 3 Communications Corp)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Debt), ) and the Company will not issue any shares of Disqualified Stock and will not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of preferred stockDisqualified Stock or Preferred Stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock Stock, and the any of its Restricted Subsidiaries may incur Indebtedness or (including Acquired Debt), issue preferred stockshares of Disqualified Stock and issue shares of Preferred Stock, if the Fixed Charge Coverage Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would not have been at least 2.0 greater than 5.50 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock Disqualified Stock or Disqualified 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 four‑quarter period; provided, further, that Restricted Subsidiaries that are not Guarantors may not incur Indebtedness or issue Disqualified Stock or Preferred Stock pursuant to the Leverage Ratio test under this Section 4.09(a) 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 the greater of $150.0 million and 7.5% of Total Assets of Indebtedness or Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors would be outstanding pursuant to the Leverage test under this first paragraph and clauses (15), (16)(B) and (17) below at such time.
(b) Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence of Indebtedness pursuant to Credit Facilities by the Company or any Restricted Subsidiary (and the incurrence by the Guarantors of Indebtedness guarantees thereof) and the issuance and creation of letters of credit under one or more 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 and its Subsidiaries thereunderface amount thereof) up to an aggregate principal amount not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (iia) $600.0 million925.0 million plus (b) 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 proceeds therefrom, the Consolidated Secured Debt Ratio would be no greater than 3.50 to 1.0, minus, in each case, the amount of permanent repayments of Indebtedness under Credit Facilities incurred pursuant to this clause (1) with the Net Proceeds from Asset Sales pursuant to clause (1) of Section 4.12(b) (provided that any unsecured Indebtedness incurred pursuant to this clause (1) shall be deemed to be secured by a Lien for the purposes of calculating the Consolidated Secured Debt Ratio for the incurrence of such Indebtedness and any other Indebtedness pursuant to this clause (1));
(2) the incurrence by the Company and its any Restricted Subsidiaries Subsidiary of the Company of the Existing IndebtednessIndebtedness (other than Indebtedness under clauses (1) and (3) and, for purposes of clause (6) below, (8) and (16));
(3) the incurrence by the Company and the any Restricted Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to this Supplemental Indentureoutstanding on the Issue Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness represented by (including Capital Lease Obligations), mortgage financings Disqualified Stock and Preferred Stock, in each case, 55 incurred for the purpose of financing all or any part of the purchase money obligationsprice or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount at any time outstanding which, taken together with all other Indebtedness incurred pursuant to this clause (4) and all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any such Indebtedness, Disqualified Stock and Preferred Stock, does not exceed the greater of $50.0 million and 2.5% of Total Assets;
(5) the incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capital Lease Obligations), Disqualified Stock and Preferred Stock, in each case, incurred for the purpose of financing all or any part of the purchase price for golf carts or cost of design, construction, installation or improvement of property, plant or equipment used or usable in a Permitted Businessgolf course maintenance equipment, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness (including Capital Lease Obligations), Disqualified Stock or Preferred Stock incurred pursuant to this clause (45), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million 300,000 at any time outstandingoutstanding for each 18-hole equivalent golf course operated by the Company or any such Restricted Subsidiary;
(56) 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, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) ), Disqualified Stock and Preferred Stock that was permitted by this Supplemental Indenture to be incurred under the Section 4.11(a4.09(a) or clause clauses (2), (3), (4), (5), (166), (15) or and (17) of this Section 4.11(b4.09(b);
(67) 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 GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the 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 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence incurrence, in the ordinary course of business and not for speculative purposes, 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 Indebtedness that is permitted by the terms of this Indenture to be outstanding or for the purpose of protecting the Company or any of its Restricted Subsidiaries against fluctuations in the ordinary course of business and not for speculative purposesforeign currency exchange rates;
(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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10) the incurrence by the Company refundable membership deposits or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) initiation fees incurred in the ordinary course of business;; 56
(11) the incurrence by the Company or any Restricted Subsidiary of (a) obligations under letters of credit or similar instruments (including reimbursement obligations with respect thereto) securing obligations (other than Indebtedness) entered into in the ordinary course of business of such Person to the extent such letters of credit or similar instruments are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no later than 30 days following receipt by such Person of a demand for reimbursement; (b) performance, bid, surety or appeal bonds and completion guarantees provided in the ordinary course of business; or (c) agreements providing for indemnification, adjustment of purchase price or similar obligations, or guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case incurred in connection with the disposition of any business, assets or Subsidiary (other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary of the Company in connection with such disposition;
(12) shares of Preferred Stock of a Restricted Subsidiary issued to the Company or another Restricted Subsidiary; provided that any subsequent issuance or transfer of Equity Interests 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 of its Restricted Subsidiaries) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock not permitted by this clause;
(13) 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 DaysDays of its incurrence;
(1214) Indebtedness consisting of Indebtedness issued by the Company or any of its Restricted Subsidiaries to future, present or former employees, directors, officers, managers and consultants thereof, their respective Controlled Investment Affiliates or Immediate Family Members, in each case to finance the purchase or redemption of Equity Interests of the Company or any direct or indirect parent company of the Company to the extent described in clause (9) of Section 4.10(b);
(15) Indebtedness, Disqualified Stock or Preferred Stock of (a) the incurrence Company or a Restricted Subsidiary incurred to finance an acquisition or (b) Persons that are acquired by Foreign the Company or any Restricted Subsidiary or merged into the Company or with or into a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, either
(a) the Company would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in Section 4.09(a), or
(b) the Leverage Ratio of the Company and the Restricted Subsidiaries is less than immediately prior to such acquisition or merger; provided, however, that on a pro forma basis, together with amounts incurred and outstanding pursuant to the second proviso to Section 4.09(a) and Sections 4.09(b)(16)(B) and (17), no more than the greater of $150.0 million and 7.5% of Total Assets of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred by Restricted Subsidiaries that are not Guarantors pursuant to this Section 4.09(b)(15) shall be incurred and outstanding; 57
(16) (A) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary equal to the net cash proceeds received by the Company since immediately after 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 Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with Section 4.10(a)(3)(b) and (c) to the extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments or to make other Investments, payments or exchanges pursuant to Section 4.10(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof) and (B) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of the Company or any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount at any time or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness and incurred pursuant to this clause (12Section 4.09(b)(16)(B), does not at any one time outstanding exceed the greater of $100.0 million and 5.0% of Total Assets; provided, however, that on a pro forma basis, together with any amounts incurred and outstanding by Restricted Subsidiaries that are not Guarantors pursuant to the second proviso to Section 4.09(a) and Sections 4.09(b)(15) and (17), no more than the greater of $150.0 million and 7.5% of Total Assets of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred pursuant to this Section 4.09(b)(16)(B) shall be incurred by Restricted Subsidiaries that are not Guarantors (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 4.09(b)(16)(B) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(16)(B) but shall be deemed incurred for the purposes of Section 4.09(a) from and after the first date on which the Company or such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) without reliance on this Section 4.09(b)(16)(B));
(17) Indebtedness, Disqualified Stock or Preferred Stock of the Company or a Restricted Subsidiary incurred to finance or assumed in connection with an acquisition in a principal amount not to exceed the greater of (i) $100.0 million and 5.0% of Consolidated Net Tangible Total Assets in the aggregate at any one time outstanding together with all other Indebtedness, Disqualified Stock and/or Preferred Stock issued under this Section 4.09(b)(17) (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 4.09(b)(17) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(17) but shall be deemed incurred for the purposes of Section 4.09(a) from and after the first date on which such Restricted Subsidiary could have incurred such Indebtedness, Disqualified Stock or Preferred Stock under Section 4.09(a) without reliance on this Section 4.09(b)(17)); provided, however, that on a pro forma basis, together with any amounts incurred and outstanding by Restricted Subsidiaries that are not Guarantors pursuant to the second proviso to Section 4.09(a) and Sections 4.09(b)(15) and (ii16)(B), no more than the greater of $150.0 million and 7.5% of Total Assets of Indebtedness, Disqualified Stock or Preferred Stock at any one time outstanding and incurred pursuant to this Section 4.09(b)(17) $100.0 million;
shall be incurred by Restricted Subsidiaries that are not Guarantors (13it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 4.09(b)(17) shall cease to be deemed incurred or outstanding for purposes of this Section 4.09(b)(17) but shall be deemed incurred for the incurrence by purposes of Section 4.09(a) from and after the Company or a Restricted Subsidiary of Indebtedness arising from agreements of first date on which the Company or such Restricted Subsidiary providing for indemnificationcould have incurred such Indebtedness, adjustment Disqualified Stock or Preferred Stock under Section 4.09(a) without reliance on this Section 4.09(b)(17)); and
(18) Indebtedness 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 shall at no time exceed the gross proceeds actually received by the Company or such any of its Restricted Subsidiary in connection with such disposition;
Subsidiaries consisting of (14A) the incurrence by the Company financing of insurance premiums or a Restricted Subsidiary of Indebtedness consisting of (B) take-or-pay obligations contained in supply agreements entered into arrangements in each case, incurred in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.. 58
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, 4.09:
(1) 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 (1718) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later and from time to time may reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.deem
Appears in 1 contract
Sources: Indenture (ClubCorp Holdings, Inc.)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company OPTI shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) Incur any Indebtedness (including Acquired Debt), and the Company will OPTI shall not issue any Disqualified Stock Stock, and will OPTI shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company commencing January 1, 2009, OPTI may incur Incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries a Guarantor may incur Incur Indebtedness or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 Relevant Period (as defined below) would have been at least 2.0 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, Relevant Period. The “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the CompanyRelevant Period” means OPTI’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 1.13 preceding (or, if fewer than four such fiscal quarters have elapsed since and including the date full fiscal quarter of OPTI ending March 31, 2009, the number of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would fiscal quarters that have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionelapsed).
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Opti Canada Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) of the Indenture is hereby superseded by the following with respect of the Notes. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or ), and the Company may issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been at least 2.0 2.00 to 11.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . The first paragraph of this Section 4.11(a1.01(15)(c) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), ) and that the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of preferred stock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the preferred stock or 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 4.11(a) will 4.09 shall not prohibit apply to the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1i) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness and letters of credit under one or more Credit Facilities (and the guarantee thereof by the Guarantors) in an aggregate principal amount outstanding pursuant to this clause (i) 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 then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (i), not to exceed $375.0 million less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets or (ii) $600.0 millionAsset Sales applied to repay any such Indebtedness pursuant to Section 4.10;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3iii) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by $180.0 million in aggregate principal amount of the Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethereof;
(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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness then outstanding incurred to refund, refinance or replace any other Indebtedness incurred pursuant to this clause (4iv), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 30.0 million at any time outstanding;
(5v) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in connection with the acquisition of assets or a new Restricted Subsidiary; provided that such Indebtedness was incurred by the prior owner of such assets or such Restricted Subsidiary prior to such acquisition by the Company or one of its Restricted Subsidiaries and was not incurred in connection with, or in contemplation of, such acquisition by the Company or one of its Restricted Subsidiaries; and provided further that the principal amount (or accreted value, as applicable) of such Indebtedness, together with any other outstanding Indebtedness incurred pursuant to this clause (v), does not exceed $10.0 million;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinancerefinance or replace, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) (other than intercompany Indebtedness or Indebtedness incurred pursuant to clause (2), (3), (4), (5), (16i) or (17) of this Section 4.11(babove);
(6vii) 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 in respect of workers' compensation claims 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;
(viii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any 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 Company or any Restricted Subsidiary (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 (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 Company and its Restricted Subsidiaries in connection with such disposition;
(ix) 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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be 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 Guarantee, in the case of a Subsidiary Guarantor; and
Notes 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 one of its Restricted Subsidiary of the Company Subsidiaries and (ii2) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a one of its Restricted Subsidiary of the Company will Subsidiaries 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);
(7x) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of the Guarantors of Hedging Obligations that are incurred for the purpose of (A) fixing, hedging or capping interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or (B) protecting the Company and its Restricted Subsidiaries of Hedging Obligations against changes in the ordinary course of business and not for speculative purposescurrency exchange rates;
(9xi) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(10xii) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xii), and the issuance of preferred stock by Unrestricted Subsidiaries;
(xiii) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16xiv) 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 then outstanding incurred to extend, refund, refinance, renew, defease refinance or replace any other Indebtedness incurred pursuant to this clause (16xiv), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (17xiv) of Section 4.11(b), above or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will be permitted to classify shall, in its sole discretion, classify, or later reclassify, such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11covenant. Indebtedness under Credit Facilities outstanding on the date on which 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 Accrual of interest, the accretion or amortization of original issue discount, accreted value and the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values4.09.
Appears in 1 contract
Sources: Indenture (L-3 Communications SPD Technologies Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) of this First Supplemental Indenture will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor 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 exceed, at any time outstanding, the greater of (ix) 30.0US$50.0 million and (y) 7.5% of Consolidated Net Tangible Assets or (ii) $600.0 millionAssets;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued pursuant to on the date of this First Supplemental Indenture;
(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 usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed exceed, at any time outstanding, the greater of (ix) 1.0US$120.0 million and (y) 18.5% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingAssets;
(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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this First Supplemental Indenture to be incurred under Section 4.11(a4.06(a) of this First Supplemental Indenture or clause clauses (2), (3), (4), (5), (16) or (1713) of this Section 4.11(b4.06(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 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
(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 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 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 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 or Treasury Management Arrangements in the ordinary course of business and not for speculative purposesbusiness;
(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 4.114.06; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(10) Indebtedness of the Company or any of its Restricted Subsidiaries constituting Acquired Debt; provided that such Acquired Debt is not incurred in contemplation of the related acquisition or merger; provided, further, that after giving effect to such acquisition and the incurrence of Indebtedness, either (i) the Company would be permitted to incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.06(a) of this First Supplemental Indenture or (ii) the Company would have had a Fixed Charge Coverage Ratio greater than the actual Fixed Charge Coverage Ratio for the Company pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.06(a) of this First Supplemental Indenture;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness (A) in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appeal, bid completion, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business, and (B) in respect of performance bonds, bank guarantees or similar obligations for or in connection with pledges, deposits or payments made or given in relation to such performance bonds, bank guarantees or similar instruments in the ordinary course of business in connection with or to secure statutory, regulatory or similar obligations, including obligations under mining, health, safety, reclamation, mine closure or other environmental obligations or in relation to infrastructure arrangements owned or provided to or applied for by the Company or any of its Restricted Subsidiaries;
(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 within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facilitybusiness days; and
(1613) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1613), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (ix) 5.0US$50.0 million and (y) 7.5% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transactionAssets.
(c) The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) For purposes of determining compliance with this Section 4.114.06, 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 (1713) of Section 4.11(b)4.06(b) of this First Supplemental Indenture, or is entitled to be incurred pursuant to Section 4.11(a)4.06(a) of this First Supplemental Indenture, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.06. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this First 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 Section 4.06(b) of Permitted Debtthis First Supplemental Indenture. The accrual of interestinterest or preferred stock dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.114.06; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any other provision of this Section 4.114.06, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.06 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
(e) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(a) the Fair Market Value of such assets at the date of determination; and
(b) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1) (i) Indebtedness, including under the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.06(b)(1)(i), not to exceed the greater of $4,500.0 million and 8.6% of Total Tangible Assets of the Company, (ii) Indebtedness, including under this clause (1) (with letters of credit being deemed to have a the EIB Facility, in an aggregate principal amount equal at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.06(b)(1)(ii), not to exceed the maximum potential liability greater of €203.4 million and 0.6% of Total Tangible Assets of the Company and its Subsidiaries thereunderCompany, (iii) Indebtedness, including under the Existing Revolving Facility, 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 Section 4.06(b)(1)(iii), not to exceed the greater of (ix) 30.0the sum of $1,700.0 million, €1,000.0 million and £300.0 million and (y) 7.3% of Consolidated Net Total Tangible Assets of the Company, (iv) Indebtedness, including under the 2027 First-Priority Secured Notes, 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 Section 4.06(b)(1)(iv), not to exceed the greater of $192.0 million and 0.5% of Total Tangible Assets of the Company, (iiv) Indebtedness, including under the Existing Term Loan Facility, 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 Section 4.06(b)(1)(v), not to exceed the greater of (x) the sum of $600.0 million4,160.0 million and €800.0 million and (y) 10.0% of Total Tangible Assets of the Company, (vi) Indebtedness, including under the 2026 Second-Priority Secured Notes, 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 Section 4.06(b)(1)(vi), not to exceed the greater of (x) the sum of $775.0 million and €425.0 million and (y) 2.6% of Total Tangible Assets of the Company, (vii) Indebtedness, including under the 2027 Second-Priority Secured Notes, 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 Section 4.06(b)(1)(vii), not to exceed the greater of $900.0 million and 1.7% of Total Tangible Assets of the Company and (viii) Indebtedness, including under the 2028 First-Priority Secured Notes, 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 Section 4.06(b)(1)(viii), not to exceed the greater of $2,405.5 million and 4.7% of Total Tangible Assets of the Company;
(2) the incurrence by the Company and its Restricted Subsidiaries of (i) Existing Indebtedness (other than Indebtedness under the Convertible Notes, the EIB Facility, the Existing Revolving Facility, the Existing Term Loan Facility, the Existing First-Priority Secured Notes, the Existing Second-Priority Secured Notes and the Existing Unsecured Notes), (ii) Indebtedness, including under the 2026 Unsecured Notes, 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 Section 4.06(b)(2)(ii), not to exceed the greater of (x) the sum of $1,450.0 million and €500.0 million and (y) 4.0% of Total Tangible Assets of the Company, (iii) Indebtedness, including under the 2027 Unsecured Notes, 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 Section 4.06(b)(2)(iii), not to exceed the greater of $3,500.0 million and 6.7% of Total Tangible Assets of the Company, (iv) Indebtedness, including under the 2029 Unsecured Notes, 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 Section 4.06(b)(2)(iv), not to exceed the greater of $2,000.0 million and 3.9% of Total Tangible Assets of the Company and (v) Indebtedness, including under the Convertible Notes and the related Guarantees, in an aggregate principal at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this Section 4.06(b)(2)(v), not to exceed the greater of $2,012.5 million and 4.0% of Total Tangible Assets of the Company;
(3) the incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Guarantees to be issued pursuant to this Supplemental IndentureNote Guarantees;
(4) 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, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price price, lease expense, rental payments or cost of design, construction, installation installation, repair, replacement or improvement of propertyproperty (including Vessels), plant or equipment or other assets (including Capital Stock) used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount or liquidation preference, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock or preferred stock issued pursuant to this clause (4), not to exceed the greater of $600.0 million and 1.5% of Total Tangible Assets at any time outstanding (it being understood that any such Indebtedness may be incurred and such Disqualified Stock and preferred stock may be issued after the acquisition, purchase, charter, leasing or rental or the design, construction, installation, repair, replacement or the making of any improvement with respect to any asset (including Vessels)); provided that the principal amount of any Indebtedness, Disqualified Stock or preferred stock permitted under this clause (4) did not in each case at the time of incurrence exceed, together with amounts previously incurred and outstanding under this clause (4) with respect to any applicable Vessel, (i) 1.0% in the case of Consolidated Net Tangible Assets a completed Vessel, the book value and (ii) $20.0 million at in the case of an uncompleted Vessel, 80% of the contract price for the acquisition or construction of such Vessel, in the case of this clause (ii), as determined on the date on which the agreement for acquisition or construction of such Vessel was entered into by the Company or its Restricted Subsidiary, plus any time outstandingother Ready for Sea Cost of such Vessel plus 100% of any related export credit insurance premium;
(5) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, the issuance by the Company or any Restricted Subsidiaries Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock in connection with any New Vessel Financing in 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 or Disqualified Stock or preferred stock issued under this clause (5)) not exceeding the New Vessel Aggregate Secured Debt Cap as calculated on the date of the relevant incurrence under this clause (5);
(6) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge, any Indebtedness (other than intercompany Indebtedness, Disqualified Stock or preferred stock) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.06(a) or clause (1), (2), (3), (4), (5), (166), (12) or (1718) of this Section 4.11(b4.06(b);
(67) 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:
(A) if the Company Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuer or a Subsidiary 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 or 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 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 Subsidiary, 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 (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries Subsidiary to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock or preferred stock; provided, however, that:
provided that (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
and (Bii) any sale or other transfer of any such Disqualified Stock or preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(910) the guarantee Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a any Restricted Subsidiary of to the Company extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.114.06; provided that that, in each case, if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or a Note Guarantee, then the guarantee shall 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) 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 and bankers’ acceptances in the ordinary course of business; (ii) in respect of letters of credit, surety, bid, performance, travel 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 past practice or industry practice (including as required by any governmental authority) and not in connection with the borrowing of money, including letters of credit or similar instruments in respect of self-insurance and workers compensation obligations, or for the protection of customer deposits or credit card payments; provided, however, that upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; (iii) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
30 days; and (12iv) consisting of (x) the incurrence by Foreign Subsidiaries financing of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause insurance premiums or (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (iy) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into agreements, in each case, in the ordinary course of business;
(1512) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted valueIndebtedness, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional or preferred stock, not to exceed the greater of stock (i) 5.0% of Consolidated Net Tangible Assets any Person outstanding on the date on which such Person becomes a Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and (iiassumption of related liabilities) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary or (ii) incurred or issued to provide all or any portion of Acquired Debtthe 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, Acquired Preferred however, with respect to this clause (12), that at the time of the acquisition or other transaction pursuant to which such Indebtedness, Disqualified Stock or Acquired Disqualified Stock; provided that immediately preferred stock was deemed to be incurred or issued, (x) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.06(a) after giving pro forma effect to the relevant acquisition or other transaction and the incurrence of such incurrence Indebtedness or issuance, as the case may be, issuance of such Disqualified Stock or preferred stock pursuant to this clause (i12) or (y) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 is incurred or 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 4.11; provided, in each such case, that the amount thereof preferred stock is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur issued pursuant to this Section 4.11 shall clause (12), taken as one period, would not be deemed less than it was immediately prior to be exceeded solely as a result giving pro forma effect to such acquisition or other transaction and the incurrence of fluctuations in exchange rates such Indebtedness or currency values.issuance of such Disqualified Stock or prefe
Appears in 1 contract
Sources: Indenture (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1) (i) Indebtedness, including under the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more 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 Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (16Section 4.06(b)(1)(i), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0$4,500.0 million and 8.6% of Consolidated Net Total Tangible Assets and of the Company, (ii) $100.0 million; and
(17) Indebtedness, including under the incurrence EIB Facility, in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, discharge any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall 4.06(b)(1)(ii), not be deemed to be exceeded solely as a result exceed the greater of fluctuations in exchange rates or currency values.€203.4 million and
Appears in 1 contract
Sources: Indenture (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not cause or 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 and will not permit any Restricted Subsidiary to issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or 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 in accordance with Section 4.21 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 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.11(a4.06(a) will not shall not, however, prohibit the incurrence of any of the following items of Indebtedness Indebtedness, without duplication (collectively, “Permitted Debt”):
(1) (i) Indebtedness, including under the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities Facilities, in an aggregate principal amount at any one time outstanding under outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (11)(i), not to exceed the greater of $4,500.0 million and 8.6% of Total Tangible Assets of the Company, (ii) [reserved], (with letters of credit being deemed to have a iii) Indebtedness, including under the Existing Revolving Facility, in an aggregate principal amount equal 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 (1)(iii), not to exceed the maximum potential liability greater of (x) the sum of $1,700.0 million, €1,000.0 million and £300.0 million and (y) 7.3% of Total Tangible Assets of the Company, (iv) Indebtedness, including under the 2027 First-Priority Secured Notes, 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 (1)(iv), not to exceed the greater of $192.0 million and 0.5% of Total Tangible Assets of the Company, (v) Indebtedness, including under the Existing Term Loan Facility, 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 (1)(v), not to exceed the greater of (x) the sum of $3,660.0 million and €800.0 million and (y) 9.1% of Total Tangible Assets of the Company, (vi) Indebtedness, including under the 2026 Second-Priority Secured Notes, 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 (1)(vi), not to exceed the greater of (x) the sum of $775.0 million and €425.0 million and (y) 2.6% of Total Tangible Assets of the Company, (vii) Indebtedness, including under the 2027 Second-Priority Secured Notes, 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 (1)(vii), not to exceed the greater of $900.0 million and 1.7% of Total Tangible Assets of the Company and its Subsidiaries thereunder(viii) Indebtedness, including under the 2028 First-Priority Secured Notes, 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 (1)(viii), not to exceed the greater of $2,405.5 million and 4.7% of Total Tangible Assets of the Company;
(2) (i) Existing Indebtedness (other than Indebtedness under the Convertible Notes, the Existing Revolving Facility, the Existing Term Loan Facility, the Existing First-Priority Secured Notes, the Existing Second-Priority Secured Notes and the Existing Unsecured Notes), (ii) Indebtedness, including under the 2026 Unsecured Notes, 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 (2)(ii), not to exceed the greater of (x) the sum of $1,450.0 million and €500.0 million and (y) 4.0% of Total Tangible Assets of the Company, (iii) Indebtedness, including under the 2027 Unsecured Notes, 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 (2)(iii), not to exceed the greater of $3,500.0 million and 6.7% of Total Tangible Assets of the Company, (iv) Indebtedness, including under the 2029 Unsecured Notes, 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 (2)(iv), not to exceed the greater of $2,000.0 million and 3.9% of Total Tangible Assets of the Company, (v) Indebtedness, including under the 2030 Unsecured Notes, 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 (2)(v), not to exceed the greater of $1,000.0 million and 2.04% of Total Tangible Assets of the Company, (vi) Indebtedness, including under the 2024 Convertible Notes, 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 (2)(vi), not to exceed the greater of $2,012.5 million and 4.0% of Total Tangible Assets of the Company, (vii) Indebtedness, including under the 2027 Convertible Notes, 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 (2)(vii) not to exceed the greater of (i) 30.0$1,131.0 million and 2.3% of Consolidated Net Total Tangible Assets or (ii) $600.0 million;
(2) the incurrence by of the Company and its Restricted Subsidiaries (viii) Indebtedness, including under the 2028 Priority Notes, 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 (2)(vii), not to exceed the greater of $2,030.0 million and 3.98% of Total Tangible Assets of the Existing IndebtednessCompany;
(3) the incurrence by the Company Issuer and the Subsidiary Guarantors of Indebtedness represented by the Notes issued on the Issue Date and the related Guarantees to be issued pursuant to this Supplemental IndentureNote Guarantees;
(4) 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, the issuance by the Company or any Restricted Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock, in each case, incurred or issued for the purpose of financing all or any part of the purchase price price, lease expense, charter hire, rental payments or cost of design, construction, installation installation, repair, replacement or improvement of propertyproperty (including Vessels), plant or equipment or other assets (including Capital Stock) used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries, in an aggregate principal amountamount or liquidation preference, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred or Disqualified Stock or preferred stock issued pursuant to this clause (4), not to exceed the greater of $600.0 million and 1.5% of Total Tangible Assets at any time outstanding (it being understood that any such Indebtedness may be incurred and such Disqualified Stock and preferred stock may be issued after the acquisition, purchase, charter, leasing or rental or the design, construction, installation, repair, replacement or the making of any improvement with respect to any asset (including Vessels)); provided that any such property (including Vessels), plant or equipment or other assets do not constitute Collateral; provided further that the principal amount of any Indebtedness, Disqualified Stock or preferred stock permitted under this clause (4) did not in each case at the time of incurrence exceed, together with amounts previously incurred and outstanding under this clause (4) with respect to any applicable Vessel, (i) 1.0% in the case of Consolidated Net Tangible Assets a completed Vessel, the book value and (ii) $20.0 million at in the case of an uncompleted Vessel, 80% of the contract price for the acquisition or construction of such Vessel, in the case of this clause (ii), as determined on the date on which the agreement for acquisition or construction of such Vessel was entered into by the Company or its Restricted Subsidiary, plus any time outstandingother Ready for Sea Cost of such Vessel plus 100% of any related export credit insurance premium;
(5) the incurrence by the Company or any Restricted Subsidiary of its Indebtedness, the issuance by the Company or any Restricted Subsidiaries Subsidiary of Disqualified Stock and the issuance by any Restricted Subsidiary of preferred stock in connection with any New Vessel Financing in 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 or Disqualified Stock or preferred stock issued under this clause (5)) not exceeding the New Vessel Aggregate Secured Debt Cap as calculated on the date of the relevant incurrence under this clause (5);
(6) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extendrenew, refund, refinance, renewreplace, defease or replace discharge, any Indebtedness (other than intercompany Indebtedness, Disqualified Stock or preferred stock) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.06(a) or clause (1), (2), (3), (4), (5), (166), (12) or (1718) of this Section 4.11(b4.06(b);
(67) 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:
(A) if the Company Issuer or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company Issuer or a Subsidiary 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 or 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 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 Subsidiary, 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 (67);
(7) 8) the issuance by any of the Company’s Restricted Subsidiaries Subsidiary to the Company or to any of its Restricted Subsidiaries of shares of Disqualified Stock or preferred stock; provided, however, that:
provided that (Ai) any subsequent issuance or transfer of Equity Interests that results in any such Disqualified Stock or preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
and (Bii) any sale or other transfer of any such Disqualified Stock or preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such Disqualified Stock or preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(910) the guarantee Guarantee by the Company or any of its Restricted Subsidiaries Subsidiary of Indebtedness of the Company or a any Restricted Subsidiary of to the Company extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.114.06; provided that that, in each case, if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesNotes or a Note Guarantee, then the guarantee shall 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) 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 and bankers’ acceptances in the ordinary course of business; (ii) in respect of letters of credit, surety, bid, performance, travel 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 past practice or industry practice (including as required by any governmental authority) and not in connection with the borrowing of money, including letters of credit or similar instruments in respect of self-insurance and workers compensation obligations, or for the protection of customer deposits or credit card payments; provided, however, that upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; (iii) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
30 days; and (12iv) consisting of (x) the incurrence by Foreign Subsidiaries financing of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause insurance premiums or (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (iy) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into agreements, in each case, in the ordinary course of business;
(1512) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted valueIndebtedness, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional or preferred stock, not to exceed the greater of stock (i) 5.0% of Consolidated Net Tangible Assets any Person outstanding on the date on which such Person becomes a Restricted Subsidiary or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and (iiassumption of related liabilities) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary or (ii) incurred or issued to provide all or any portion of Acquired Debtthe 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, Acquired Preferred however, with respect to this clause (12), that at the time of the acquisition or other transaction pursuant to which such Indebtedness, Disqualified Stock or Acquired Disqualified Stock; provided that immediately after giving effect preferred stock was deemed to such incurrence be incurred or issuance, as the case may beissued, (ix) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.test set forth in
Appears in 1 contract
Sources: Indenture (Carnival PLC)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”"INCUR") any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock Stock, and will the Company shall not permit any of its Restricted Subsidiaries to issue any shares of Disqualified Stock or preferred stock; provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt) ), or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred would have been at least 2.0 2.25 to 11 from the date of this Indenture through and including the one year anniversary from the date of this Indenture and 2.50 to 1 thereafter, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) . So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this Section 4.11(a) will 4.09 shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”"PERMITTED DEBT"):
(1) the incurrence by the Company or any Restricted Subsidiary Guarantor of Indebtedness and letters of credit (a) under one or more the Credit Facilities Agreement, in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed $250.0 million, and (b) under other 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 greater maximum potential liability thereunder) not to exceed $15.0 million, in each case less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any Restricted Subsidiary to repay such Indebtedness (iand, in the case of Indebtedness under a revolving credit facility, to effect a corresponding commitment reduction thereunder) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionpursuant to Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes to be issued on the date of this Indenture and the related Guarantees Exchange Notes to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement and any Guarantee of the Notes by a Restricted Subsidiary;
(4) the incurrence by the Company or any of its Restricted Subsidiaries Guarantor 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 usable in a Permitted Businesssuch Guarantor, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 40.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under the first paragraph of this Section 4.11(a) 4.09 or clause clauses (2), (3), (4), (5), (16) or (1711) of this Section 4.11(b)paragraph;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and or any of its Restricted Subsidiaries; provided, however, that:
(Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the 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 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 shares of preferred stock; providedincurrence, 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 in the ordinary course of business and not for speculative purposes;
(9) the guarantee , by the Company or any of its Restricted Subsidiaries of:
(a) Hedging Obligations with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(b) Currency Hedging Obligations incurred for the purpose of protecting the Company or any of its Restricted Subsidiaries against fluctuations in foreign currency exchange rates;
(c) Commodity Price Protection Obligations incurred for the purpose of protecting the Company or any of its Restricted Subsidiaries against fluctuations in the price of raw materials used in the ordinary course of its business;
(8) the guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11; provided that if 4.09;
(9) the accrual of interest, the accretion or amortization of original issue discount and 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 shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09; provided, then in each such case, that the guarantee shall be subordinated to amount thereof is included in Fixed Charges of the same extent Company as the Indebtedness guaranteedaccrued;
(10) the incurrence issuance by the Company of Permitted Disqualified Stock, the net proceeds of which are used to refund, refinance or any replace
(a) Indebtedness that was permitted to be incurred under the first paragraph of its Restricted Subsidiaries this Section 4.09 or clauses (2), (3), (4), (5) or (11) of Indebtedness in respect this paragraph, (b) Disqualified Stock that was permitted to be issued under the first paragraph of workers’ compensation claimsthis Section 4.09 or (c) Permitted Disqualified Stock that was permitted to be issued under this clause (10) of this paragraph; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries 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 extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (1611), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 25.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1711) of Section 4.11(b)above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.11(a)4.09, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, incurrence in any manner that complies with this Section 4.114.09, including applying such Indebtedness to any one or more categories. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially shall be deemed to have been incurred on such date in reliance on the exception provided by clause clauses (1) or (2) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Longview Fibre Co)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company and any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries any Guarantor may incur Indebtedness or issue preferred stock, if in each case the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, and as otherwise provided in accordance with the provisions contained in the case definition of Acquired Debt, giving pro forma effect to the applicable transaction related thereto“Fixed Charge Coverage Ratio”), as if the additional Indebtedness had been incurred (and such transaction had occurred) incurred, or the Disqualified Stock or preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such fourFour-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of Quarter Period. Notwithstanding any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and4.09, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or no event will any of its Non-Guarantor Restricted Subsidiaries of Subsidiary be permitted to incur Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12under Section 4.09(b)(iv), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12xiv), not to exceed the greater of (ixvi) 5.0% of Consolidated Net Tangible Assets and (iixix) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company outstanding in excess of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), 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 preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 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 2.0 2.5 to 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) will hereof shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any Restricted Subsidiary Guarantor 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 exceed:
(A) prior to July 7, 2008, the greater of (i) 30.0% $170.0 million less the aggregate amount of Consolidated all Net Tangible Assets Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10 hereof less any amount that is released by the Hedge Counterparty under the Hedge Letter of Credit and (ii) 30% of ACNTA as of the date of such incurrence; and
(B) on or after July 7, 2008, the greater of (i) $600.0 130.0 million less the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries since the 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 less any amount that is released by the Hedge Counterparty under the Hedge Letter of Credit and (ii) 30% of ACNTA as of the date of such incurrence less $40.0 million; provided that such amounts in the foregoing clauses (i) and (ii) of this paragraph shall be reduced by an additional $10.0 million on each of the fifth, sixth and seventh anniversaries of the date of this Indenture;
(2) the incurrence by the Company and any Guarantor of Indebtedness under the Hedge Agreement;
(3) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(34) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenture;
(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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstandingRegistration Rights Agreement;
(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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause (2), clauses (3), (4), (5), (16) or (1714) of this Section 4.11(b4.09(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 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 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 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will , shall 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 in the ordinary course of business and not for speculative purposes(other than pursuant to the Hedge Agreement);
(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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee 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; selfin-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee kind obligations relating to net oil and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) natural gas balancing positions arising in the ordinary course of business;
(11) any obligation arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, guarantee, adjustment of purchase price, holdback, contingency payment obligations based on the performance of the acquired or disposed asset or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, asset or Capital Stock of a Restricted Subsidiary of the Company;
(12) the incurrence by the Company or any of its Restricted Subsidiaries the Guarantors of Indebtedness in respect of workers' compensation claims, self-insurance obligations, bankers' acceptances, performance and surety bonds in the ordinary course of business;
(13) the incurrence by the Company or any of the Guarantors of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;and
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1614), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 25.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1714) of Section 4.11(b)above, or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company will shall be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. The amount of any premium payable on Indebtedness upon the prepayment, redemption or other retirement for value of such Indebtedness shall be disregarded in determining the amount of such Indebtedness. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 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 shall be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Sources: Indenture (Belden & Blake Corp /Oh/)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly or directly liable, contingently or otherwise, with respect to (collectively, “incur”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 stockPreferred Stock; provided, however, that the Company Issuer and any Restricted Subsidiary that is a Guarantor may incur Indebtedness (including Acquired Debt) or and any Restricted Subsidiary that is a Guarantor may issue Disqualified Preferred Stock and the Restricted Subsidiaries may incur Indebtedness or 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Preferred Stock is issued would have been (x) prior to January 1, 2006, at least 2.0 to 1.0 and (y) on and after January 1, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be2006, at the beginning of such four-quarter period.
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company 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 least 2.375 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 million;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations1.0, 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at 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 extend, refund, refinance, renew, defease or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or clause (2), (3), (4), (5), (16) or (17) of this Section 4.11(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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case of a 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) (the "COVERAGE RATIO EXCEPTION"), as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock the additional Indebtedness had been incurred or issued 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, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit Neither Icahn Enterprises nor any of its Restricted Subsidiaries to, directly or indirectly, Guarantor will 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 neither Icahn Enterprises nor any Guarantor will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stockStock; provided, however, that the Company Icahn Enterprises or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, if immediately after giving effect to the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 4.21 would have been at least 2.0 to 1, determined on a pro forma basis incurrence of additional Indebtedness (including Acquired Debt) or issuance of Disqualified Stock (including a pro forma application of the net proceeds therefrom andtherefrom), the ratio of the aggregate principal amount of all outstanding Indebtedness (excluding Indebtedness incurred pursuant to clauses (4), (7) and (8) of Section 4.08(b)) of Icahn Enterprises and any Guarantor, determined on a consolidated basis between Icahn Enterprises and any Guarantor but on a non-consolidated basis with the Subsidiaries of Icahn Enterprises (other than any Guarantor) and otherwise in the case accordance with GAAP, (including an amount of Acquired Debt, giving pro forma effect Indebtedness equal to the applicable transaction related thereto)principal amount of any Guarantees by Icahn Enterprises or any Guarantor of any Indebtedness of a Person (that is not Icahn Enterprises or a Subsidiary) to the extent such Guarantees were not included in computing Icahn Enterprises’ or any Guarantor’s outstanding Indebtedness) to the Adjusted Controlled Entity Net Worth, as if the additional Indebtedness had would have been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter periodless than 1.15 to 1.
(b) The provisions of Section 4.11(a4.08(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company Icahn Enterprises or any Restricted Subsidiary Guarantor of Indebtedness represented by the Notes to be issued on the date of this Indenture 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 the exchange Notes to have a principal amount equal be issued pursuant to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionRegistration Rights Agreement;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indenture;
(4) the incurrence by the Company Icahn Enterprises 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 or usable in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 million at any time outstanding;
(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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.08(a) or clause clauses (21), (3), (4), (5), (162) or (179) of this Section 4.11(b)4.08(b) or any Existing Indebtedness;
(63) the incurrence by the Company Icahn Enterprises or any of its Restricted Subsidiaries Guarantor of intercompany Indebtedness between or among the Company Icahn Enterprises and any of its Restricted Subsidiaries; provided, however, that:
Subsidiaries (Aincluding Icahn Enterprises Holdings) 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 expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Guarantee, in the case issuance of a Subsidiary Guarantor; and
(B) (i) Disqualified Stock by 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 Guarantor 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)Icahn Enterprises;
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed;
(104) the incurrence by the Company Icahn Enterprises or any Guarantor of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) Hedging Obligations that are incurred in the ordinary normal course of business;
(115) the incurrence by the Company Icahn Enterprises 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 Foreign Subsidiaries Icahn Enterprises or any Guarantor of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 millionExisting Indebtedness;
(137) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company any agreement entered into by Icahn Enterprises or such Restricted Subsidiary Icahn Enterprises Holdings providing for indemnification, adjustment of purchase price adjustment or similar obligations, in each case, incurred or assumed 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such dispositionan asset sale;
(148) Indebtedness of Icahn Enterprises or any Guarantor attributable to Bad Boy Guarantees; and
(9) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company Icahn Enterprises or any of its Restricted Subsidiaries Guarantor of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease refinance or replace any Indebtedness incurred pursuant to this clause (169), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, ; not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or 10.0 million at any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit one time outstanding. Neither Icahn Enterprises nor any Subsidiary Guarantor to incur, will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company Icahn Enterprises or such Subsidiary any Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee Note Guarantee, as applicable, on substantially identical terms; provided, however, that no Indebtedness will of Icahn Enterprises or any Guarantor shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company Icahn Enterprises or any Guarantor for purposes of this paragraph solely by virtue of being unsecured or by virtue of being secured to a lesser extent or on a first or junior Lien basis.
. To the extent Icahn Enterprises or any Guarantor incurs any intercompany Indebtedness, (da) if Icahn Enterprises or any Guarantor is the obligor on such Indebtedness, such Indebtedness (other than intercompany Indebtedness of any Guarantor to or from Icahn Enterprises or another Guarantor) must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes and (b)(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than Icahn Enterprises or a Subsidiary of Icahn Enterprises (including any Guarantor) and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Icahn Enterprises or a Subsidiary of Icahn Enterprises (including any Guarantor) shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Icahn Enterprises or any Guarantor, that is not intercompany Indebtedness; provided that in the case of clause (a), that no restriction on the payment of principal, interest or other 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 4.114.08, 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 (1) through (179) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a4.08(a), in each case, as of the Company will be permitted to date of incurrence thereof, Icahn Enterprises shall, in its sole discretion, classify (or later reclassify in whole or in part, in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. 4.08 and such Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture will initially be deemed to have treated as having been incurred on pursuant to such date in reliance on clauses or Section 4.08(a), as the exception provided case may be, designated by clause (1) of the definition of Permitted DebtIcahn Enterprises. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest or Other Liquidated Damages on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock 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 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued4.08. Notwithstanding any other provision of this Section 4.114.08, the maximum amount of Indebtedness that the Company Icahn Enterprises or any Restricted Subsidiary Guarantor may incur pursuant to this Section 4.11 4.08 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness of the other Person.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and neither the Company nor any Restricted Subsidiary will not issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue preferred stockStock, if the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued, would have been at least 2.0 2.25 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1) the incurrence by the Company or any Restricted Subsidiary of additional Indebtedness and (including letters of credit credit) under one or more Credit Facilities in an Facilities, provided that, after giving effect to any such incurrence, the aggregate principal amount at any one time outstanding of all Indebtedness incurred under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) and then outstanding does not exceed an amount equal to exceed the greater greatest of (ia) 30.0$500.0 million (provided, however, that no more than $150.0 million aggregate principal amount may be incurred and outstanding under this clause by Restricted Subsidiaries that are not Subsidiary Guarantors), (b) the Borrowing Base in effect at the time of such incurrence (provided, however, that no more than $150.0 million aggregate principal amount may be incurred and outstanding under this clause by Restricted Subsidiaries that are not Subsidiary Guarantors), and (c)(i) prior to the date that the requisite EPL Entities become Subsidiary Guarantors in accordance with Section 4.17, 12.5% of Consolidated Net Tangible Assets Modified ACNTA on the date of incurrence, or (ii) $600.0 million;thereafter, 15.0% of Modified ACNTA on the date of incurrence
(2) the incurrence by the Company and or any of its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Guarantees to be issued pursuant to this Supplemental Indentureon 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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 35.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (16) or (1712) of this Section 4.11(b4.09(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 Subsidiary Guarantor is the obligor on such Indebtedness and the payee a Subsidiary Guarantor is not the Company or a Subsidiary Guarantorobligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither 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 case Guarantee of the Company, or the Guarantee, in the case of a such Subsidiary 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 shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9) 8) the guarantee by the Company or any of its Restricted Subsidiaries the Subsidiary Guarantors of Indebtedness of the Company or a Restricted any Subsidiary of the Company Guarantor that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteed4.09;
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) obligations relating to net gas balancing positions arising in the ordinary course of businessbusiness and consistent with past practice;
(10) the incurrence by the Company’s Unrestricted Subsidiaries of Non-Recourse Debt provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that 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 by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding such Indebtedness, Disqualified Stock or preferred stock pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness arising from agreements of the Company or such any of its Restricted Subsidiary Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or subsidiaryCapital Stock of a 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 shall at no time exceed the gross proceeds actually received by the Company or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 50.0 million; and
(1715) Indebtedness to the incurrence or issuanceextent the proceeds thereof are used to finance insurance premiums. Notwithstanding anything to the contrary in this Section 4.09, as the case may be, by the Company or any and its Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall Subsidiaries will not incur, and shall not permit any Subsidiary Guarantor to incur, incur any Indebtedness (including Permitted Debtother than any DIP Financing (as defined in and as permitted by the Intercreditor Agreement)) that secured by a Priority Lien unless the principal amount of such Indebtedness (other than any DIP Financing) is contractually subordinated pari passu in right of payment to any other Pari Passu Indebtedness with the principal amount of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any all other Indebtedness of the Company solely secured by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) Priority Lien. For purposes of determining compliance with this Section 4.114.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (1715) of this Section 4.11(b)4.09, or is entitled to be incurred pursuant to Section 4.11(a4.09(a), the Company will be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. covenant; provided that any Indebtedness under the Credit Facilities outstanding Agreement on the date on which Issue Date after giving effect to the use of proceeds of the Notes are first issued and authenticated shall be considered incurred 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” of this Section 4.09 and may not be later reclassifed. The amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP. Indebtedness of any Person existing at the time such Person becomes a Restricted Subsidiary shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock 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 4.11covenant; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
Appears in 1 contract
Sources: Indenture (Energy XXI LTD)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any Disqualified Stock or shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), issue shares of Disqualified Stock and the Restricted Subsidiaries may incur Indebtedness or issue shares of 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 in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued would have been at least 2.0 to 11.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock or preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.. The first paragraph of this Section 4.09 shall not prohibit:
(b) Section 4.11(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):
(1i) the incurrence by the Company or any of its Restricted Subsidiary Subsidiaries 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 (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 (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 1,700.0 million;
(2ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing IndebtednessIndebtedness (other than Indebtedness described in clauses (i) and (iii);
(3iii) the incurrence by the Company and the Subsidiary Guarantors any Guarantor of Indebtedness represented by the Notes (other than Additional Notes) and the related Exchange Notes issued in exchange therefor and any Subsidiary Guarantees to be issued pursuant to this Supplemental Indentureof the foregoing;
(4iv) the incurrence Indebtedness (including Capital Lease Obligations other than Deemed Capitalized Leases), Disqualified Stock and preferred stock incurred by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligationsto 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 (other than software) that is used or usable useful in a Permitted BusinessBusiness (but excluding the purchase of Capital Stock of any Person), in an provided that the aggregate principal amountamount of Indebtedness, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness Disqualified Stock and preferred stock incurred pursuant to this clause (4), iv) when aggregated with the then outstanding amount of such obligations under clause (v) incurred to refinance such obligations initially incurred in reliance on this clause (iv) does not to exceed the greater of (i) 1.05.0% of Consolidated Net Tangible Assets and (iidetermined as of the time of such incurrence) $20.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a) or this clause (2v), the first paragraph of this Section 4.09 or clauses (ii), (3iii), (4iv), (5), (16x) or (17xvi) of this Section 4.11(b)paragraph and related interest, premiums, fees and other Obligations;
(6vi) 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:
(Aa) if the Company or any Subsidiary Guarantor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary GuarantorIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Indebtedness, Disqualified Stock or preferred stock 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 Indebtedness, Disqualified Stock or preferred stock (but for the avoidance of doubt excluding the grant of a Permitted Lien thereon) to a Person that is not either neither the Company or nor a Restricted Subsidiary of the Company will shall 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 (6vi);
(7vii) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesObligations;
(9viii) the guarantee Guarantee by the Company or any a Restricted Subsidiary of its Restricted Subsidiaries the Company of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.11Section; provided that if in the event such Indebtedness that is being guaranteed is subordinated to or (a) pari passu with the Notes, then the guarantee shall be subordinated 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 or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company Notes or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuanceGuarantee, as the case may be, by then the Company related Guarantee shall rank equally in right of payment to the Notes or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuanceGuarantee, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (yb) equal subordinated to the Notes or greater than it would have been immediately preceding such incurrence or (ii) a Subsidiary Guarantee, as the Consolidated Net Worth of case may be, then the Company would related Guarantee shall be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and or such Subsidiary Guarantee, as the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.case may be;
(dix) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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 interestinterest or dividends, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, 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 and the incurrence of unrealized losses or charges in respect of Hedging Obligations (including those resulting from the application of FAS 133, ASC Topic 815 and similar provisions), in each case will not be deemed not to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.11covenant;
(x) 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 or acquisition of any business, assets or a Restricted Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the fair market value of the consideration actually received (or, in the case of an acquisition, paid) by the Company and its Restricted Subsidiaries in connection with such transaction;
(xi) Indebtedness supported by one or more letters of credit incurred under a Credit Facility in accordance with and pursuant to clause (i) of this paragraph; provided the amount of Indebtedness permitted to be incurred under this clause (xi) relating to any such letter of credit shall not exceed the amount of the letter of credit provided for therein; provided further, that upon any reduction, cancellation or termination of the applicable letter of credit, there shall be deemed to be an incurrence of Indebtedness under this Indenture equal to the excess of the amount of such Indebtedness outstanding immediately after such reduction, cancellation or termination over the remaining stated amount, if any, of such letter of credit or the stated amount of any letter of credit issued in replacement of such letter of credit;
(xii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten Business Days of incurrence;
(xiii) Indebtedness represented by property, liability and workers’ compensation insurance, completion guarantees, performance bonds (provided that to the extent that such performance bonds secure Indebtedness, such Indebtedness is otherwise permitted under this Section), surety bonds, appeal bonds and other obligations (which, in each such case, that may be in the amount thereof is included form of or secured by letters of credit), in Fixed Charges each case required or incurred in the ordinary course of business or in connection with the enforcement of rights or claims of the Company or any Restricted Subsidiary of the Company or in connection with judgments that do not result in a Default or an Event of Default and all reimbursement obligations under such letters of credit;
(xiv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness, Disqualified Stock or preferred stock that is not secured by a Lien in an aggregate principal amount (or accreted value or liquidation preference, as accruedapplicable) at any time outstanding not to exceed $350.0 million;
(xv) Construction Indebtedness and Permitted Refinancing Indebtedness incurred in respect thereof in an aggregate principal amount that does not exceed $100.0 million at any time outstanding;
(xvi) Indebtedness, Disqualified Stock or preferred 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 the Company or a Restricted Subsidiary in accordance with the terms of this Indenture; provided that after giving effect to such acquisition or merger, 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 sentence of this Section 4.09, or
(b) the Fixed Charge Coverage Ratio is equal to or greater than such ratio immediately prior to such acquisition or merger;
(xvii) Indebtedness of the Company or any of its Restricted Subsidiaries to an Unrestricted Subsidiary for money borrowed; provided that such Indebtedness is subordinated in right of payment to the Notes or such Restricted Subsidiary’s Subsidiary Guarantee, the Weighted Average Life to Maturity of such Indebtedness is greater than the Weighted Average Life to Maturity of the Notes and the holders of such Indebtedness are not permitted to accelerate such Indebtedness or exercise any other remedies with respect thereto until 91 days after the Stated Maturity of the Notes; and
(xviii) Indebtedness incurred by the Company or any Restricted Subsidiary with respect to Digital Projector Financing in an aggregate principal amount incurred not to exceed (i) $70.0 million during the period from the Start Date to the first anniversary thereof; (ii) $70.0 million during the period from the first anniversary of the Start Date to the second anniversary of the Start Date; and (iii) $60.0 million after the second anniversary of the Start Date, provided that any unused or repaid amounts may be carried forward and used in subsequent periods without limitation. Neither the Company nor any Restricted Subsidiary shall incur any Indebtedness under the preceding paragraph if the proceeds thereof are used, directly or indirectly, to refinance any Indebtedness subordinated to the Notes or any Subsidiary Guarantee unless such Indebtedness shall be subordinated to the Notes or such Subsidiary Guarantee to at least the same extent as such subordinated Indebtedness. No Restricted Subsidiary of the Company that is not a Guarantor may incur any Indebtedness (other than Senior Debt) if the proceeds are used to refinance Indebtedness of the Company or a Guarantor (other than a refinancing of all the Notes). For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness (including Acquired Debt) meets the criteria of more than one of the categories described in clauses (i) through (xviii) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify (or later classify or reclassify in whole or in part in its sole discretion) such item of Indebtedness in any manner that complies with this Section 4.09, provided that all Indebtedness under the Credit Agreement outstanding on the Issue Date shall be deemed to have been incurred on the Issue Date pursuant to clause (i) above and the Company shall not be permitted to later reclassify all or any portion of such Indebtedness under the Credit Agreement outstanding on the Issue Date. Notwithstanding any other provision of this Section 4.11Section, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates rate of currencies. The principal amount of any Disqualified Stock of the Company or currency valuesa Restricted Subsidiary, or preferred stock of a Restricted Subsidiary that is not a Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof.
Appears in 1 contract
Sources: Indenture (Cinemark Usa Inc /Tx)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly 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 shall not issue any Disqualified Stock and will shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and if the Restricted Subsidiaries may incur Company's Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or issue preferred stockthe issuance of such Disqualified Stock, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom as if the Fixed Charge Coverage Ratio for same had occurred at the Company’s beginning of the most recently ended four full fiscal quarters quarter period of the Company for which internal financial statements are available in accordance with Section 4.21 available, would have been at least 2.0 no greater than (a) 7.0 to 1, determined if such incurrence or issuance is on a pro forma basis or prior to April 15, 2005 and (including a pro forma application of the net proceeds therefrom andb) 6.5 to 1, in the case of Acquired Debtif such incurrence or issuance is after April 15, giving pro forma effect to the applicable transaction related thereto), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.2005;
(b) The provisions of Section 4.11(a4.09(a) will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or and any of its Restricted Subsidiary Subsidiaries 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 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 $200.0 million less the greater aggregate amount of (i) 30.0% all Net Proceeds of Consolidated Net Tangible Assets Asset Sales applied by the Company or (ii) $600.0 millionany of its Restricted Subsidiaries since the date of this Indenture to repay any Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder pursuant to Section 4.10;
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary Guarantors of Indebtedness represented by the Notes and the related Subsidiary Guarantees to be issued on the date of this Indenture and the Exchange Notes and the related Subsidiary Guarantees to be issued pursuant to this Supplemental Indenturethe 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 usable in a Permitted Businesssuch Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 10.0 million at 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 extend, refund, refinance, renew, defease refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (16) or (1710) of this Section 4.11(b4.09(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 obligee under such Indebtedness is not neither the Company or nor a Subsidiary Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of the Company, or the Subsidiary 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 Company; shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);
(7) the issuance by any of the Company’s Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company; will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);
(8) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in that are incurred for the ordinary course purpose of business and not for speculative purposesfixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding;
(9) 8) 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 that was permitted to be incurred by another provision of this Section 4.11; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee shall be subordinated to the same extent as the Indebtedness guaranteedcovenant;
(109) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; self-insurance or similar obligations; the financing of insurance premiums; bankers’ acceptances; performance, appeal, bid completion, guarantee and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) in the ordinary course of business;
(11) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred 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 shall at no time exceed the gross proceeds actually received by the Company or such Restricted Subsidiary in connection with such disposition;
(14) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(d) For purposes of determining compliance with this Section 4.11, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (17) of Section 4.11(b), or is entitled to be incurred pursuant to Section 4.11(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11. Indebtedness under Credit Facilities outstanding on the date on which 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, 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 shall not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this Section 4.11; provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.11, the maximum amount of 4.09;
(10) Indebtedness that incurred by the Company or any Restricted Subsidiary may incur 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; 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;
(11) Indebtedness consisting of customary indemnification, adjustments of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition of any business or assets;
(12) Obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of business; and
(13) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (13), not to exceed $10.0 million. For purposes of determining compliance with this Section 4.11 shall 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 (13) above, or is entitled to be incurred pursuant to Section 4.09(a), the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.09. Accrual of interest, accretion or amortization of original issue discount and the accretion of accreted value will not be deemed to be exceeded solely as a result an incurrence of fluctuations Indebtedness for purposes of this Section 4.09. Indebtedness under Credit Facilities outstanding on the date on which the Notes are first issued and authenticated under this Indenture will be deemed to have been incurred on such date in exchange rates or currency valuesreliance on the exception provided by clause (1) of the definition of Permitted Debt.
Appears in 1 contract
Sources: Indenture (Block Communications Inc)
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) 3.1 The Company shall will not, and shall will not cause or 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 and will not permit any other Obligor to, issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that that:
(a) subject to Clause 3.3 below, the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock Stock, the Obligors (other than the Company) may issue Disqualified Stock, and the Restricted Subsidiaries Obligors (other than the Company) 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 in accordance with Section 4.21 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 2.0 to 11.0, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.; and
(b) Section 4.11(aif the Indebtedness to be incurred is Senior Secured Indebtedness, subject to Clause 3.3 below, the Obligors may incur such Senior Secured Indebtedness if the Consolidated Senior Secured Leverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred is less than 4.0 to 1.0 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the Indebtedness had been incurred at the beginning of such four-quarter period; provided that such Senior Secured Indebtedness shall not be ranked ahead of the indebtedness under the Finance Documents in the payment waterfall in clause 14 (Application of Proceeds) of the Intercreditor Agreement.
3.2 Subject to Clause 3.3 below, Clause 3.1 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, the “Permitted Debt”):
(1a) the incurrence by the Company 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 to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed the greater of (i) 30.0% of Consolidated Net Tangible Assets or (ii) $600.0 millionFacility;
(2b) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3c) the incurrence by the Company and the Subsidiary Guarantors Obligors of (i) Indebtedness represented by the Notes and the related Note Guarantees issued on the Issue Date and (ii) Indebtedness under the RCF Facilities in an aggregate outstanding amount not to be issued pursuant to this Supplemental Indentureexceed £75,000,000 at any time;
(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 or refinancing all or any part of the purchase price or cost of design, construction, lease, installation or improvement of propertyproperty (real or personal), plant or equipment used or usable useful in a Permitted Business, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred in exchange for, or the net proceeds of which were used to renew, refund, refinance refinance, replace, defease or replace discharge any Indebtedness incurred pursuant to this clause paragraph (4d), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 £50.0 million at 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture the Finance Documents to be incurred under Section 4.11(a) Clause 3.1 or clause paragraphs (2b), (3c), (4), (5), (16e) or (17l) of this Section 4.11(b)Clause 3.2;
(6f) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its such Restricted Subsidiaries; provided, however, that:
(Ai) if the Company or any Subsidiary Guarantor Obligor is the obligor on such Indebtedness and the payee is not the Company or a Subsidiary Guarantoran Obligor, 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 Facility and the case of the Company, or the Guarantee, in the case of a Subsidiary GuarantorFinance Documents; 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 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 paragraph (6f);
(7g) the issuance by any Restricted Subsidiary of the Company’s Restricted Subsidiaries Company to the Company or to any of its Restricted Subsidiaries of shares of preferred stockstock in compliance with Clause 1.5; provided, however, that:
(Ai) 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 any of its Restricted Subsidiary of the CompanySubsidiaries; and
(Bii) any sale or other transfer of any such preferred stock to a Person that is not either the Company or a any of its Restricted Subsidiary of the Company; Subsidiaries, 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 paragraph (7g);
(8) h) the incurrence by the Company or any of its Restricted Subsidiaries Subsidiary of Hedging Obligations in the ordinary course of business and not for speculative purposes;
(9i) the guarantee Guarantee by the Company or any of its Restricted Subsidiaries of Indebtedness of the Company or a any of its Restricted Subsidiary of Subsidiaries to the Company extent that the guaranteed Indebtedness was permitted to be incurred by another provision of this Section 4.11Clause 3.2; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the NotesFacility, then the guarantee shall Guarantee must be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteedguaranteed (and ranking below indebtedness under the Finance Documents in the payment waterfall in clause 14 (Application of Proceeds) of the Intercreditor Agreement);
(10j) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ acceptances; performance, appealcustoms, bid completionVAT and other tax guarantees, guarantee performance and surety bonds; or similar requirements (and, in all cases, letters of credit in respect thereof) bonds in the ordinary course of business;
(11k) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring honouring 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;
(12l) Indebtedness of any Person outstanding on the date on which such Person becomes a Restricted Subsidiary of the Company or is merged, consolidated, amalgamated or otherwise combined with (including pursuant to any acquisition of assets and assumption of related liabilities) the incurrence by Foreign Company or any of its Restricted Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing other than Indebtedness incurred to refund, refinance, defease, renew, extend provide all or replace Indebtedness incurred any portion of the funds used to consummate the transaction or series of related transactions pursuant to this clause (12), not to exceed which such Person became a Restricted Subsidiary of the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence Company or was otherwise acquired by the Company or a any of its Restricted Subsidiary Subsidiaries); provided, however, with respect to this paragraph (1), 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 paragraph (a) of Clause 3.1 after giving pro forma effect to the incurrence of such Indebtedness pursuant to this paragraph (l);
(m) Indebtedness arising from agreements of the Company or such any of its Restricted Subsidiary Subsidiaries providing for customary indemnification, adjustment obligations in respect of earnouts or other adjustments of purchase price or or, in each case, similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, business or assets or subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion Equity Interests of such businessa Subsidiary, assets or subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate 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 or such and its Restricted Subsidiary Subsidiaries in connection with such disposition;; and
(14n) the incurrence by the Company or a Restricted Subsidiary of Indebtedness consisting of take-or-pay obligations contained in supply agreements entered into in the ordinary course of business;
(15) the incurrence by the Company of Indebtedness to any of its Subsidiaries incurred in connection with the purchase of accounts receivable and related assets by the Company from any such Subsidiary which assets are subsequently conveyed by the Company in connection with a Receivable Facility; and
(16) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to extend, refund, refinance, renew, defease or replace any Indebtedness incurred pursuant to this clause (16), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, outstanding not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 £50.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) The Company shall not incur, and shall not permit any Subsidiary Guarantor to incur, 3.3 No Obligor will incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor Obligors unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Guarantee Facility 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 Obligors solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien priority basis.
(d) 3.4 For purposes of determining compliance with this Section 4.11Clause 3, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses paragraphs (1a) through to (17n) of Section 4.11(b)Clause 3.2 above, or is entitled to be incurred pursuant to Section 4.11(a)paragraph (a) of Clause 3.1, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, incurrence or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.11Clause 3. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Supplemental Indenture Facility will initially be deemed to have been incurred on such date in reliance on the exception provided by clause under paragraph (1a) of the definition of Permitted DebtDebt in Clause 3.2 and may not be reclassified. The accrual of interestinterest or preferred stock dividends, the accretion or amortization amortisation of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on preferred stock or Disqualified Stock in the form of additional shares of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this Section 4.11Clause 3; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges Consolidated Interest Expense of the Company as accrued. Notwithstanding any other provision of this Section 4.11Clause 3, the maximum amount of Indebtedness that the Company or any of its Restricted Subsidiary Subsidiaries may incur pursuant to this Section 4.11 Clause 3 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.
3.5 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:
(i) the Fair Market Value of such assets at the date of determination; and
(ii) the amount of the Indebtedness of the other Person.
(d) For purposes of determining compliance with any sterling-denominated restriction on the incurrence of Indebtedness, the Sterling Equivalent of the principal amount of Indebtedness denominated in another currency will 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 Indebtedness incurred under a revolving credit facility; provided that (i) if such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than sterling, and such refinancing would cause the applicable sterling-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such sterling-denominated restriction will 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; (ii) the Sterling Equivalent of the principal amount of any such Indebtedness outstanding on the Issue Date will be calculated based on the relevant currency exchange rate in effect on the Issue Date; and (iii) if and for so long as any such Indebtedness is subject to an agreement intended to protect against fluctuations in currency exchange rates with respect to the currency in which such Indebtedness is denominated covering principal and interest on such Indebtedness, the amount of such Indebtedness, if denominated in sterling, will be the amount of the principal payment required to be made under such currency agreement and, otherwise, the Sterling Equivalent of such amount plus the Sterling Equivalent of any premium which is at such time due and payable but is not covered by such currency agreement.
Appears in 1 contract
Incurrence of Indebtedness and Issuance of Preferred Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “"incur”") any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock and the Restricted Subsidiaries Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for the Company’s 's most recently ended four full fiscal quarters for which internal financial statements are available in accordance with Section 4.21 immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or preferred stock is issued, as the case may be, would have been at least (a) 2.0 to 11.0, if the date of such incurrence or issuance is on or prior to February 15, 2008, or (b) 2.25 to 1.0, if the date of such incurrence or issuance is after February 15, 2008, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom and, in the case of Acquired Debt, giving pro forma effect to the applicable transaction related theretotherefrom), as if the additional Indebtedness had been incurred (and such transaction had occurred) or the Disqualified Stock or the preferred stock or Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period.
(b) The provisions of Section 4.11(a4.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “"Permitted Debt”"):
(1) the incurrence by the Company or (and the Guarantee thereof by any Restricted Subsidiary Guarantor) of Indebtedness and letters of credit under one or more 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 the greater of (ix) 30.0% of Consolidated Net Tangible Assets $50.0 million or (iiy) $600.0 millionthe amount of the Borrowing Base as of the date of such incurrence; plus the amount of any reasonable 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 (1);
(2) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Subsidiary 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 Guarantees to be issued pursuant to this Supplemental Indenturethe Registration Rights Agreement;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Attributable Debt in connection with a sale and leaseback of the facility located in Janesville, Wisconsin and owned by the Company on the date of this Indenture, in an aggregate principal amount for all Attributable Debt, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Attributable Debt incurred pursuant to this clause (4), not to exceed $5.0 million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of (i) Attributable Debt in connection with a sale and leaseback transaction or (ii) 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 property, plant or equipment used in the business of the Company or usable in a Permitted Businessany of its Restricted Subsidiaries (whether through the direct acquisition or otherwise of such Equity Interests of any Person owning such assets), in an aggregate principal amountamount for all Attributable Debt and all Indebtedness, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance refinance, replace, defease or replace discharge any Attributable Debt and other Indebtedness incurred pursuant to this clause (45), not to exceed the greater of (i) 1.0% of Consolidated Net Tangible Assets and (ii) $20.0 5.0 million at any time outstanding;
(56) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Supplemental Indenture to be incurred under Section 4.11(a4.09(a) hereof or clause clauses (2), (3), (4), (5), (166), (12), (15) or (1718) of this Section 4.11(b4.09(b);
(67) 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 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 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 Company Subsidiary, 58 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 (67);
(7) 8) the issuance by any of the Company’s 's Restricted Subsidiaries to the Company or to any of its Restricted Subsidiaries of shares of preferred stock; provided, however, that:
(A) any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than the Company or a Restricted Subsidiary of the CompanySubsidiary; and
(B) any sale or other transfer of any such preferred stock (other than solely as a result of the creation of a Permitted Lien upon such Equity Interests) to a Person that is not either the Company or a Restricted Subsidiary of the Company; Subsidiary, will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7)8);
(8) 9) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculative purposesbusiness;
(910) 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 that was permitted to be incurred by another provision of this Section 4.114.09; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the guarantee Guarantee 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 of Indebtedness obligations in respect of workers’ ' compensation claims; , self-insurance or similar obligations; the financing of insurance premiums; , bankers’ ' acceptances; , performance, appeal, bid completion, guarantee completion and surety bonds; or , completion guarantees and similar requirements (and, in all cases, letters of credit in respect thereof) obligations 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 within five Business Days;
(12) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal amount at any time outstanding pursuant to this clause (12), including all Permitted Refinancing Indebtedness incurred to refund, refinance, defease, renew, extend or replace Indebtedness incurred pursuant to this clause (12), not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 million;
(13) the incurrence by the Company or a Restricted Subsidiary of Indebtedness arising from agreements of the Company or such Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the sale or other disposition of any business, assets or subsidiaryCapital Stock of the Company or any Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or subsidiary for the purpose of financing such acquisitionCapital Stock; provided that (A) the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds proceeds, whether or not cash, actually received by the Company or such and its Restricted Subsidiary Subsidiaries in connection with such dispositiondisposition and (B) such Indebtedness is not reflected in 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 (B));
(14) the incurrence by the Company or a any of its Restricted Subsidiary Subsidiaries of Indebtedness consisting contingent liabilities arising out of take-or-pay obligations contained in supply agreements entered into endorsements of checks and other negotiable instruments for deposit or collection in the ordinary course of business;
(15) the incurrence by a Foreign Subsidiary of additional Indebtedness in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (15), not to exceed $5.0 million at any time outstanding;
(16) the incurrence by the Company of Indebtedness to or any of its Restricted Subsidiaries incurred of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in connection 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 purchase drawing of accounts receivable and related assets by such instruments or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(17) Indebtedness of the Company from or any such Subsidiary which assets of its Restricted Subsidiaries to the extent the proceeds thereof are subsequently conveyed by substantially concurrently used to redeem the Company Notes in connection full or deposited to defease or discharge the Notes, in each case, in accordance with a Receivable Facilitythis Indenture; and
(1618) 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 extendrenew, refund, refinance, renewreplace, defease or replace discharge any Indebtedness incurred pursuant to this clause (1618), and the issuance by the Company of any Disqualified Stock and by any Restricted Subsidiary of any additional preferred stock, not to exceed the greater of (i) 5.0% of Consolidated Net Tangible Assets and (ii) $100.0 10.0 million; and
(17) the incurrence or issuance, as the case may be, by the Company or any Restricted Subsidiary of Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock; provided that immediately after giving effect to such incurrence or issuance, as the case may be, (i) the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which financial statements are available in accordance with Section 1.13 preceding the date of such incurrence or issuance, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if such Acquired Debt, Acquired Preferred Stock or Acquired Disqualified Stock had been incurred or issued at the beginning of such four-quarter period, would be (x) at least 2.0 to 1 or (y) equal to or greater than it would have been immediately preceding such incurrence or (ii) the Consolidated Net Worth of the Company would be greater than the Consolidated Net Worth of the Company immediately prior to such transaction.
(c) . The Company shall will not incur, and shall will not permit any Subsidiary Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Pari Passu Indebtedness of the Company or such Subsidiary Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company or any such Guarantor, as applicable, solely by reason of any Liens or guarantees arising or created in respect thereof or, by virtue of being unsecured or by virtue reason of being secured on a first or junior Lien basis.
(d) . For purposes of determining compliance with this Section 4.114.09, 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 (1718) of Section 4.11(b), above or is entitled to be incurred pursuant to Section 4.11(a)4.09(a) hereof, the Company (in its sole discretion) will be permitted to divide and classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 4.114.09. Indebtedness under Credit Facilities outstanding on the date on which 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, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.114.09; provided, in each such case, that the amount thereof of any such accrual, accretion or payment is included in Fixed Charges of the Company as accrued. Notwithstanding any other provision of this Section 4.114.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.11 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness;
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such assets at the date of determination; and
(B) the amount of the Indebtedness subject to such Lien of the other Person;
(4) with respect to Indebtedness of others supported by a guarantee of the Company or a Restricted Subsidiary, the lesser of the amount of the primary indebtedness and any stated limit on recourse under the guarantee; and
(5) the amount of the Indebtedness in respect of any Hedging Obligations at any time shall be equal to the amount payable as a result of the termination of such Hedging Obligations at such time.
Appears in 1 contract
Sources: Indenture (RathGibson Inc)