Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”). (b) The foregoing limitations will not apply to (collectively, “Permitted Debt”): (i) the Incurrence by the Issuer or its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million; (ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof; (iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above); (iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding; (v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business; (vi) Indebtedness, Disqualified Stock or Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture; (vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii); (viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii); (ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
Appears in 1 contract
Sources: Indenture (Sylvamo Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Holdings shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect, contingently or otherwise (collectively, "incur" and collectively, an "incurrence"), to any Indebtedness (including Acquired Indebtedness) or and Holdings shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary Obligors may Incur incur Indebtedness (including Acquired Guarantor Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of or Preferred Stock, in each case as applicable, if the Fixed Charge Coverage RatioConsolidated Leverage Ratio on a consolidated basis for Holdings and its Subsidiaries would have been less than 4.00 to 1.00, calculated as determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom), as if the additional Indebtedness is Incurred had been incurred, or such the Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”)had been issued.
(b) The foregoing limitations will provisions of Section 4.07(a) hereof shall not apply to (collectively, “Permitted Debt”):to:
(i) the Incurrence incurrence by the Issuer or its Restricted Subsidiaries an Obligor of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Facilities and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed of $970.0 million 1.0 billion outstanding at any one time plus time, less the greater aggregate amount of amortization and mandatory principal payments (i) $250.0 million and (ii) 50.0% excluding repayments of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing revolving facility thereunder that do not result in a permanent reduction or cancellation of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount revolving facility) actually made by an Obligor in respect of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionIndebtedness;
(ii) the Incurrence by Indebtedness of an Obligor under the Issuer Existing Notes and the Guarantors Indebtedness of Indebtedness represented an Obligor under the Existing Bridge Loan immediately following the Refinancing, in each case less the aggregate amount of amortization and mandatory or voluntary principal payments actually made by the Notes (not including any Additional Notes) issued on such Obligor thereunder after the Issue Date and the Guarantees thereofDate;
(iii) Indebtedness of any Person that becomes a Subsidiary of Holdings after the Issuer date hereof; provided that such Indebtedness exists at the time such Person becomes a Subsidiary of Holdings and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described is not created in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement contemplation of or in respect connection with such Person becoming a Subsidiary of Holdings; provided, further, that the Notes Incurred under Section 3.3(b)(iiaggregate principal amount of Indebtedness permitted to exist by this clause (iii) above)shall not exceed $25,000,000.00 at any time outstanding;
(iv) (i) Indebtedness (incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capitalized Capital Lease Obligations and mortgage financings as purchase money obligationsany Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (x) Incurred by such Indebtedness is incurred prior to or within 180 days after such acquisition or the Issuer or any completion of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair such construction or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (iiy) the aggregate principal amount of Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to permitted by this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets 25,000,000.00 at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect incurred in relation to letters of credit or bank guarantees or similar instruments issued arrangements made in the ordinary course of business or with respect to facilitate the Existing Bilateral Letter operation of Credit, including, without limitation, bank accounts on a net balance basis;
(ivi) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other short term Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies from banks incurred in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock business pursuant to a facility required in order to comply with rules and regulations issued from time to time by regulatory authorities; provided that such compliance is required for Holdings or Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, a Subsidiary of the Issuer or other Investment in accordance with the terms of this IndentureHoldings, as applicable, to remain licensed to conduct its business;
(vii) Indebtedness of Holdings or Disqualified Stock any of the Issuer its Wholly-Owned Subsidiaries to a Restricted SubsidiaryHoldings or any of its Wholly-Owned Subsidiaries; provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness (except for Indebtedness represented by any guarantee provided by Holdings in favor of a Wholly-Owned Subsidiary in respect of Indebtedness of another Wholly-Owned Subsidiary the subordination of which would be prohibited by the FSA or Disqualified Stock owing the UK Pensions Trustee) that is owed by an Obligor to a Non-Guarantor Subsidiary Obligor in excess of $5.0 million, such Indebtedness 100,000,000.00 in the aggregate shall be subordinated pursuant a subordination agreement in the form attached hereto as Exhibit F or Disqualified Stock is subordinated in right of payment on terms reasonably satisfactory to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) Required Holders; provided, further, 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 Indebtedness or Disqualified Stock (except to the Issuer Holdings or another Restricted Subsidiaryany of its Wholly-Owned Subsidiaries) shall be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock that was not permitted by this clause (vii);
(viii) shares the incurrence by an Obligor of Preferred Indebtedness or Disqualified Stock of a Restricted Subsidiary issued that serves to the Issuer extend, refund, refinance, renew, replace or another Restricted Subsidiary; provided that (xdefease any Indebtedness or Disqualified Stock incurred as permitted under Section 4.07(a) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 millionhereof, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii)) or any Indebtedness or Disqualified Stock issued to so refund or refinance such Indebtedness or Disqualified Stock, including additional Indebtedness or Disqualified Stock incurred to pay premiums, fees and expenses 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 Notes;
(B) to the extent such Refinancing Indebtedness refinances (x) Indebtedness subordinated or pari passu to the Notes or any Guarantee, such Refinancing Indebtedness is subordinated or pari passu to the Notes or such Guarantee at least to the same extent as the Indebtedness being refinanced or refunded or (y) Disqualified Stock, such Refinancing Indebtedness must be Disqualified Stock; and
(C) such Indebtedness is issued and guaranteed by the same entities that issued and/or guaranteed the Indebtedness being redeemed, repurchased, acquired or retired; and
(ix) Indebtedness, Disqualified Stock or Preferred Stock other Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock Holdings or any other event that results of its Subsidiaries in an aggregate principal amount not exceeding $150,000,000.00 at any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);time outstanding.
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer will not issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary Guarantor may incur Indebtedness (including Acquired Indebtedness), issue shares of Preferred StockDisqualified Stock or issue shares of preferred stock, in each case if the Fixed Charge Coverage Ratio, calculated as of Ratio for the Issuer 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 additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock preferred stock is issued and would have been at least 2.0 to 1.0, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stockpreferred stock had been issued, “Ratio Debt”).
(b) as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period. The foregoing limitations will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence by incurrence of Indebtedness of the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) Facilities in an aggregate amount at any time outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 42.5 million;
(ii2) the Incurrence incurrence by the Issuer and the Guarantors any Guarantor of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof;
(iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering MemorandumGuarantee) (other than any Additional Notes);
(3) Existing Indebtedness under the New Credit Agreement or (other than Indebtedness described in respect of the Notes Incurred under Section 3.3(b)(iiclauses (1) and (2) above);
(iv) (i4) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligationsObligations) Incurred by the Issuer incurred, or any of its Restricted Subsidiaries, Disqualified Stock issued and preferred stock issued, by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair lease or improvement of property (real or personal), plant ) or equipment that is used or other fixed or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and , in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued preferred stock then outstanding and incurred pursuant to this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, and including all Refinancing Indebtedness Incurred and incurred to refund, refinance or replace any other Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued preferred stock incurred pursuant to this clause (iv4), does not to exceed the greater of (ax) $195.0 15.0 million and (by) 7.02.75% of Total Assets at any one time outstandingas of the date of such incurrence;
(v5) Indebtedness Incurred incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or and bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, including without limitation, (i) limitation letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current to employees or former) former employees or their families or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-reimbursement type obligations regarding workers’ compensation claims; provided, healthhowever, disability that upon the drawing of such letters of credit or other employee benefits (whether current the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of businessincurrence;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness arising from agreements of the Issuer or any of its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the acquisition or disposition of any business, assetsassets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that the maximum assumable liability in respect of all such Indebtedness 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 Issuer or other Investment and its Restricted Subsidiaries in accordance connection with the terms of this Indenturesuch disposition;
(vii7) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if that, other than in the case of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer or a Guarantor Incurs or issues and its Restricted Subsidiaries to finance working capital needs of the Restricted Subsidiaries, any such Indebtedness or Disqualified Stock owing to a Nonnon-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes; provided, further, that any subsequent issuance or transfer of any 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 Indebtedness (except to the Notes Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (7);
(8) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that, other than in the case of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Issuer and its Restricted Subsidiaries to finance working capital needs of the Restricted Subsidiaries, if a Guarantor owes such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor such Indebtedness is expressly subordinated in right of payment to the Guarantee of such Guarantor and Guarantor; provided, further, that, in the case of Indebtedness to another Restricted Subsidiary, any subsequent issuance or transfer of any 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 Indebtedness (yexcept to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of such Indebtedness not permitted by this clause (8);
(9) shares of preferred stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 preferred stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of such shares of Preferred Stock preferred stock not permitted by this clause (viii9);
(ix10) IndebtednessHedging Obligations (excluding Hedging Obligations entered into for speculative purposes) incurred in the ordinary course of business;
(11) Indebtedness and other obligations in respect of performance, Disqualified Stock or Preferred Stock bid, appeal and surety bonds and completion guarantees and other obligations of a Restricted Subsidiary owing to like nature provided by the Issuer or another any of its Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such IndebtednessSubsidiaries in the ordinary course of business, Disqualified Stock or Preferred Stock owing including, but not limited to, Indebtedness with respect to a Non-Guarantor Subsidiary guarantee, surety bond or other Contingent Obligation, in excess form and substance sufficient to satisfy the requirements set forth at 10 C.F.R. 30.35 or comparable state regulations, as applicable, the face amount of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated which shall be adjusted from time to time in right of payment accordance with applicable regulations to reflect adjustments to the Guarantee decommissioning funding plan for any of such Guarantor and (y) any subsequent issuance or transfer the facilities of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another any of its Restricted SubsidiarySubsidiaries;
(12) shall be deemed, Indebtedness of any Guarantor in each case, to be an Incurrence respect of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix)Guarantor’s Guarantee;
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not shall issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Preferred Disqualified Stock; provided. The provisions of the first paragraph of this Section 4.09 shall not apply to:
(a) Indebtedness consisting of guarantees of, however, that or existing by virtue of Liens on the assets of the Issuer securing, the Revolving Credit Facility, the Letter of Credit Facility and the Term Loan A Facility; provided that (i) the amount of any Restricted Subsidiary may Incur such Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined secured on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together pari passu basis with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, Notes shall not exceed the greater of $165.0 200.0 million and 6.0% of Total Assets at any one time outstanding shall be subject to the Equal Priority Intercreditor Agreement and (any ii) such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”).Indebtedness shall be subject to an Intercreditor Agreement;
(b) The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(i) the Incurrence incurrence by the Issuer or its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(ii) the Incurrence by the Issuer and the Guarantors Note Parties of Indebtedness represented by the Notes (not including any Note Guarantees thereof, but excluding any Additional NotesNotes and any Note Guarantees thereof) issued on the Issue Date and or the Guarantees thereofExchange Date;
(iiic) Indebtedness and Disqualified Stock of the Issuer and its Restricted Subsidiaries outstanding (issued or Incurred pursuant owing to any commitment outstanding) on the Issue Date (Subsidiary and/or of any Subsidiary issued or contemplated owing to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or and/or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or other Subsidiary; provided that any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to any Subsidiary that is not a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii)Notes;
(viiid) shares Indebtedness of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing pursuant to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii)Subordinated Intercompany Loan;
(ixe) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that [reserved];
(xf) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix)[reserved];
Appears in 1 contract
Sources: Indenture (New Fortress Energy Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $250.0 525.0 million, (B) the sum of (x) $200.0 million and (iiy) 50.035.0% of Four Quarter EBITDA ACNTA at the time of incurrence and (IIC) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Issuers and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) issued on the Issue Date and the Guarantees thereof);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 45.0 million and (by) 7.04.5% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-reimbursement- type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from (a) Permitted Intercompany Activities and (b) agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a NonRestricted Subsidiary that is not a Guarantor or the Co-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock Issuer is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor or the Co-Issuer and owing to a Restricted Subsidiary that is not a Guarantor or the Co-Issuer is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor or the Obligations under the Notes of the Co-Issuer to the extent permitted by applicable law and (y) it does not result in adverse tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a the Issuer or any Restricted Subsidiary owing in an aggregate principal amount or liquidation preference up to 100% of the net cash proceeds received by the Company since immediately after the Prior 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, proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or another Restricted Subsidiary; provided that any of its Subsidiaries) as determined in accordance with clauses (x3)(B) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess and (3)(C) of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment Section 4.07(a) to the Guarantee extent such net cash proceeds or cash have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(a) or to make Permitted Investments specified in clauses (10), (12) or (21) of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtednessthe definition thereof, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);and
Appears in 1 contract
Sources: Indenture (Vine Energy Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding 1.00 (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”).
(b) The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(i) the Incurrence by the Issuer or its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 2,400.0 million outstanding at any one time plus the greater of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount whichwhich when taken together with amounts outstanding under clause (I) and, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (iclause)) , would not cause the Consolidated Senior Secured Net Debt Ratio to exceed 2.20 3.50 to 1.00; provided that any Indebtedness Incurred under clause clauses (I) and (II) of this clause (ia) shall be deemed to be Consolidated Senior Secured Debt Indebtedness, whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Net Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionthereof;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof;
(iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Senior Credit Agreement Incurred under clause (i) above or in respect of the Initial Notes Incurred under Section 3.3(b)(iiclause (ii) above);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 150.0 million and (b) 7.027.5% of Total Assets Four Quarter EBITDA, at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligationscontingent obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 millionSubsidiary, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if either (A) the Fixed Charge Coverage RatioRatio for the Applicable Measurement Period would have been at least 2.00 to 1.00 or (B) the Consolidated Total Debt Ratio would have been less than or equal to 2.25 to 1.00, calculated as in each case, determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom), as if the additional Indebtedness is Incurred had been incurred, or such the Disqualified Stock or Preferred Stock is issued had been issued, as the case may be, and determined on a Pro Forma Basis for the Incurrence (including the use application of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that therefrom had occurred at the aggregate principal amount beginning of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”)Applicable Measurement Period.
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness under (X) Credit Facilities (other than the ABL Credit Agreement) by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time not to exceed the sum of (a) $400.0 million, plus (b) the greater of (ix) $250.0 480.0 million and (iiy) 50.0100.0% of Four Quarter Consolidated EBITDA and of the Issuer for the Applicable Measurement Period at the time of any incurrence, plus (IIc) an additional aggregate principal amount whichamount, if after giving Pro Forma Effect pro forma effect to the incurrence of such Incurrence (including Additional First Lien Obligations and the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date application of the initial borrowing proceeds therefrom, the Consolidated First Lien Debt Ratio would be no greater than 2.00 to 1.00, outstanding at any one time; provided that for purposes of such Indebtedness or entry into determining the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount that may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with incurred under this clause (i1)(X)(c)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any , all Indebtedness Incurred incurred under clause (II) of this clause (i1)(X)(c) shall be deemed to be included in clause (1) of the definition of “Consolidated Senior Secured First Lien Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof Ratio” and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(iiY) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof;
(iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New ABL Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to an aggregate principal amount outstanding at any one time not to exceed the greater of (a) $1,000.0 million and (b) the Borrowing Base as of the date of such incurrence less the aggregate principal amount of Obligations outstanding under Permitted Receivables Financings;
(2) the incurrence by the Issuer and any Restricted Subsidiaries Guarantor of Indebtedness represented by the Notes (including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto);
(3) Indebtedness of the Issuer and the Restricted Subsidiaries in existence on the Issue Date (other than Indebtedness described in clauses (1) and (2) of this Section 10.11(b));
(4) Indebtedness (including Capitalized Lease Obligations and Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of the Restricted Subsidiaries, to finance all or any part of the purchase, lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal), plant or equipment or any other fixed or capital assets (asset, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and ; provided that the aggregate amount of Indebtedness, Disqualified Stock or and Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued outstanding pursuant to this clause (iv4) (for other than capital leases (and Capitalized Lease Obligations) that are characterized as such based on subjective acceleration clauses or cross default clauses, without giving effect to any change in GAAP subsequent to December 31, 2014), when aggregated with the avoidance outstanding amount of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i13) shall not count toward the cap below of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (iv)4), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance does not at any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to time outstanding exceed the greater of (ax) $195.0 168.0 million and (by) 7.035.0% of Total Assets Consolidated EBITDA of the Issuer for the Applicable Measurement Period at the time of any one time outstandingincurrence;
(v5) (a) Indebtedness Incurred incurred by the Issuer or any of its the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or credit, bankers’ acceptances, bank guarantees guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditpast practice, including, without limitation, (i) including letters of credit in favor of suppliers or performance trade creditors or surety bonds in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance and (iib) Indebtedness of the Issuer or any of its Restricted Subsidiaries as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by suppliers, customers in connection with the purchase or other acquisition of equipment or supplies creditors issued in the ordinary course of businessbusiness or consistent with past practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness arising from agreements of the Issuer or its any of the Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, nonearn-compete, consulting out or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the acquisition or disposition of any business, assets, Subsidiary or an Investment, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the Issuer or other Investment in accordance with the terms purpose of this Indenturefinancing such acquisition;
(vii7) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock owing to a Non-Guarantor Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in excess respect of $5.0 millionaccounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness or Disqualified Stock is expressly subordinated in right of payment (to the Issuer’s Obligations with respect extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of such Guarantor and (y) Notes; provided, further, that any subsequent issuance or transfer (other than the incurrence of a Permitted Lien) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)clause;
(viii8) Indebtedness of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that if a Restricted Subsidiary that is a Guarantor incurs such Indebtedness owing to a Restricted Subsidiary that is not a Guarantor, excluding any Indebtedness in respect of accounts payable incurred in connection with goods and services rendered in the ordinary course of business or consistent with past practice (and not in connection with the borrowing of money), such Indebtedness is expressly subordinated in right of payment (to the extent permitted by applicable law and it does not result in material adverse tax consequences) to the Notes or the Guarantee of the Notes of such Guarantor; provided, further, that any subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien (but not foreclosure thereon)) shall be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) not permitted by this clause;
(9) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer (other than the incurrence of a Permitted Lien) of any such Indebtedness, Disqualified shares of Preferred Stock or Preferred Disqualified Stock (except to the Issuer or another Restricted SubsidiarySubsidiary or any pledge of such Capital Stock constituting a Permitted Lien (but not foreclosure thereon)) shall be deemeddeemed in each case to be an issuance of such shares of Preferred Stock or Disqualified Stock, as applicable (to the extent such Preferred Stock or Disqualified Stock is then outstanding), not permitted by this clause;
(10) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, indemnity, bid, appeal, judgment, and surety and other similar bonds or instruments and performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Issuer or any of the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, in the ordinary course of business or consistent with past practice or in connection with judgments that do not result in an Event of Default;
(a) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries in an aggregate principal amount or liquidation preference up to 200.0% of the net cash proceeds received by the Issuer since the Issue Date from the issue or sale of Equity Interests of the Issuer or cash contributed to the capital of the Issuer (in each case, other than Excluded Contributions or proceeds of Disqualified Stock or sales of Equity Interests to the Issuer or any of its Subsidiaries) as determined in accordance with clauses (2)(b) and (2)(c) of Section 10.10(a) 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 10.10(b) or to make Permitted Investments (other than Permitted Investments specified in clauses (1), (2) and (3) of the definition thereof) (any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12)(a), “Contribution Debt”) and (b) Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued pursuant to this clause (12)(b) and any outstanding amount of Indebtedness under Section 10.11(b)(13) incurred to refinance Indebtedness initially incurred in reliance on this clause (12)(b), does not at any one time outstanding exceed the sum of (A) the greater of (x) $240.0 million and (y) 50.0% of Consolidated EBITDA of the Issuer for the Applicable Measurement Period and (B) the amount available under Section 10.10(a)(2) that is not otherwise applied pursuant to such clause as in effect immediately prior to the incurrence of such Indebtedness (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this clause (12)(b) shall (i) solely to the extent incurred pursuant to clause 12(b)(B) and remaining outstanding, reduce on a dollar-for-dollar basis, the available amount under Section 10.10(a)(2) and (ii) cease to be an Incurrence deemed incurred or outstanding for purposes of this clause (12)(b) but shall be deemed incurred pursuant to Section 10.11(a) from and after the first date on which the Issuer or such Restricted Subsidiary could have incurred or issued such Indebtedness, Disqualified Stock or Preferred Stock not under Section 10.11(a));
(13) the incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or the issuance by the Issuer or any Restricted Subsidiary of Disqualified Stock or Preferred Stock that serves to refund, refinance, replace, renew, extend or defease (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a correlative meaning) any Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or any of its Restricted Subsidiaries incurred or issued as permitted by under Section 10.11(a) and clauses (2), (3), (4) and (12)(b), this clause (ix13) and clauses (14), (18), (19) and (27) of this Section 10.11(b) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refinance such Indebtedness, Disqualified Stock or Preferred Stock including additional Indebtedness, Disqualified Stock or Preferred Stock incurred to pay accrued but unpaid interest, dividends, premiums (including tender premiums), defeasance costs, underwriting discounts, fees, costs and expenses (including original issue discount, upfront fees or similar fees) in connection with such refinancing (the “Refinancing Indebtedness”) on or 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, Disqualified Stock or Preferred Stock being refinanced (or requires no or nominal payments in cash (other than interest payments) prior to the date that is 91 days after the maturity date of the Notes),
(B) to the extent such Refinancing Indebtedness refinances (i) Indebtedness subordinated in right of payment to the Notes or any Guarantee thereof, such Refinancing Indebtedness is subordinated in right of payment to the Notes or such Guarantee at least to the same extent as the Indebtedness being refinanced or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness must be Disqualified Stock or Preferred Stock, respectively,
(C) shall not include Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Issuer or a Subsidiary of the Issuer that is a Guarantor, and
(D) to the extent such Indebtedness, Disqualified Stock or Preferred Stock refinanced is Secured Indebtedness, the Liens securing such Refinancing Indebtedness, Disqualified Stock or Preferred Stock shall have a lien priority equal to or junior to the Liens securing the Indebtedness being refinanced; and provided further that subclause (A) of this clause (13) shall not apply to any refinancing of any Secured Indebtedness;
(14) Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or a Restricted Subsidiary incurred or issued to finance an acquisition or Investment or (y) Persons that are acquired by the Issuer or a Restricted Subsidiary or merged into, amalgamated with or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture (including designating an Unrestricted Subsidiary a Restricted Subsidiary); provided that after giving pro forma effect to such Investment, acquisition, merger, amalgamation or consolidation, either:
(A) (a) the Issuer would
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor or the Co-Issuer to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $250.0 million 1,250.0 million, (B) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrence and (iiC) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Issuers and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) issued on the Issue Date and the Guarantees thereof);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assetsassets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts) and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 160.0 million and (by) 7.04.0% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a NonRestricted Subsidiary that is not a Guarantor or the Co-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock Issuer is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor or the Co-Issuer and owing to a Restricted Subsidiary that is not a Guarantor or the Co-Issuer is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor or the Obligations under the Notes of the Co-Issuer to the extent permitted by applicable law and (y) it does not result in adverse tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) the incurrence of Indebtedness or issuance of Disqualified Stock of the Company and the incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount and liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and incurred or issued, as applicable, pursuant to this clause (12), together with any Refinancing Indebtedness in respect thereof (excluding any Incremental Amounts), does not exceed (as of the date such Indebtedness, Disqualified Stock or Preferred Stock is issued, incurred or otherwise obtained) (i) the greater of (x) $200.0 million and (y) 5.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrence; plus, without duplication, (ii) in the event of any extension, replacement, refinancing, renewal or defeasance of any such Indebtedness, Disqualified Stock or Preferred Stock, an amount equal to (x) any accrued and unpaid interest on the Indebtedness, any accrued and unpaid dividends on the Preferred Stock, and any accrued and unpaid dividends on the Disqualified Stock being so refinanced, extended, replaced, refunded, renewed or defeased plus (y) the amount of any tender premium or penalty or premium required to be paid under the terms of the instrument or documents governing such Indebtedness, Disqualified Stock or Preferred Stock and any defeasance costs and any fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Disqualified Stock or Preferred Stock or the extension, replacement, refunding, refinancing, renewal or defeasance of such Indebtedness, Disqualified Stock or Preferred Stock;
(13) the incurrence or issuance by the Company of Refinancing Indebtedness or the incurrence or issuance by a Restricted Subsidiary of Refinancing Indebtedness that serves to refund, refinance, extend, replace, renew or defease (collectively, “refinance” with “refinances,” “refinanced,” and “refinancing” having a correlative meaning) any Indebtedness (including any Designated Revolving Commitments) incurred or Disqualified Stock or Preferred Stock issued as permitted under Section 4.09(a) and Sections 4.09(b)(2), (3) and (4), this Section 4.09(b)(13) and Section 4.09(b)(14) or any successive Refinancing Indebtedness with respect to any of the foregoing;
(14) the incurrence or issuance of (a) Indebtedness or Disqualified Stock of the Company or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing incurred or issued to finance an acquisition or investment (or other purchase of assets) or that is assumed by the Issuer Company or another any Restricted SubsidiarySubsidiary in connection with such acquisition or investment (or other purchase of assets); provided that and (xb) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to of Persons that are acquired by the Company or any Restricted Subsidiary or merged into, amalgamated or consolidated with the Company or a Non-Guarantor Restricted Subsidiary in excess accordance with the terms of this Indenture; provided that in each case:
(i) after giving pro forma effect to such acquisition, amalgamation, consolidation or merger, the Company would be permitted to incur at least $5.0 million1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Test; or
(ii) after giving pro forma effect to such acquisition, amalgamation, consolidation or merger, the Fixed Charge Coverage Ratio of the Company for the Test Period preceding the date on which such Indebtedness, additional Indebtedness is incurred or such Disqualified Stock or Preferred Stock is subordinated in right issued would be no less than the Fixed Charge Coverage Ratio immediately prior to giving effect to such incurrence of payment to the Guarantee Indebtedness or issuance of such Guarantor and (y) any subsequent issuance or transfer of any Capital Disqualified Stock or any other event that results Preferred Stock, in any Restricted Subsidiary lending such Indebtednesseach case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock ceasing had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period;
(15) the incurrence of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or consistent with industry practice;
(16) the incurrence of Indebtedness of the Company or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to be any Credit Facility, in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;
(17) (a) the incurrence of any guarantee by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligation incurred by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture, or (b) any co-issuance by the Company or any Restricted Subsidiary of any Indebtedness or other obligations of the Company or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary was permitted under the terms of this Indenture;
(18) the incurrence of Indebtedness issued by the Company or any Restricted Subsidiary to future, present or former employees, directors, officers, members of management, consultants and independent contractors of the Company, any Restricted Subsidiary or any other subsequent transfer of any such IndebtednessParent Company, Disqualified Stock their respective Controlled Investment Affiliates or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemedImmediate Family Members and permitted transferees thereof, in each case, case to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);finance the p
Appears in 1 contract
Sources: Indenture (Magnolia Oil & Gas Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Parent shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) any Indebtedness (including Acquired Indebtedness) or ), and the Parent shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”).
(b) The foregoing limitations will provisions of Section 4.10(a) hereof shall not apply to (collectively, “Permitted Debt”):to:
(i) the Incurrence by the Issuer or its Restricted Subsidiaries 1. The incurrence of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), by the Toys Delaware Group under the Toys Delaware ABL DIP Facility, up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 2,300.0 million outstanding at any one time outstanding;
2. the incurrence of Indebtedness by the Toys Delaware Group under the Toys Delaware Term Loan DIP Facility, up to an aggregate principal amount not to exceed $450.0 million at any one time outstanding; and
3. the incurrence of Indebtedness by the Toys Delaware Group under the Toys Delaware Term Loan Facility, up to an aggregate principal amount not to exceed, at any one time outstanding, the aggregate principal amount outstanding thereunder as of the Issue Date; in each of case (i) and (ii), (x) net of the amount of all mandatory principal payments or repurchases actually made thereunder in respect of Indebtedness thereunder with the net proceeds from asset sales and (y) plus any premium, accrued interest on, or related fees and expenses in incurred in connection with any refinancing of Indebtedness incurred pursuant to such subclause;
(2) Indebtedness of the greater Parent and its Restricted Subsidiaries in respect of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(ii) the Incurrence by the Issuer Notes and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) Guarantees issued on the Issue Date and the Guarantees thereof;
Date, (iiiii) other Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) in existence on the Issue Date (or contemplated to be excluding Indebtedness under the Specified Toys Delaware Facilities and the Specified Taj Facilities) listed on Schedule C hereto and (iii) Capitalized Lease Obligation existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above)Issue Date;
(iv) (i3) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted SubsidiariesObligations), Disqualified Stock issued or Preferred Stock incurred by the Issuer Parent or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant ) or equipment that is used or other fixed or capital assets useful in a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) ), in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness, then outstanding and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued incurred pursuant to this clause (iv3) and, if applicable, Section 4.10(c)(5) hereof (for the avoidance including any refinancing indebtedness outstanding in respect of doubt Indebtedness Incurred originally incurred under another provision of this Section 3.3(b4.10(c)(5) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)hereof), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), does not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding100.0 million;
(v4) Indebtedness Incurred incurred by the Issuer Parent or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, including without limitation, (i) limitation letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees or self-insurance; provided that upon the drawing of Indebtedness Incurred by customers in connection with such letters of credit or the purchase incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or other acquisition of equipment or supplies in the ordinary course of businessincurrence;
(vi5) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness arising from agreements of the Issuer Parent or its a Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, nonearn-compete, consulting outs or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the disposition or acquisition or disposition of any business, assetsassets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that in the Issuer or other Investment case of a disposition, the maximum assumable liability in accordance respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash 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 Parent and any Restricted Subsidiaries in connection with the terms of this Indenturea disposition;
(vii6) Indebtedness of the Parent owed to and held by any Restricted Subsidiary or Disqualified Indebtedness of a Restricted Subsidiary owed to and held by the Parent or any other Restricted Subsidiary; provided that 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 Parent or a Restricted Subsidiary) shall be deemed, in each case, to constitute the incurrence of such Indebtedness by the issuer thereof;
(7) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer to Parent or a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 Parent or another a Restricted Subsidiary) shall be deemed, deemed in each case, case to be an issuance of such shares of Preferred Stock not Stock;
(8) Hedging Obligations of the Parent or any Restricted Subsidiary (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting, hedging or managing (A) interest rates with respect to any Indebtedness that is permitted by the terms of this clause Indenture to be outstanding, (viiiB) currency exchange rates or (C) commodity prices or otherwise entered into in the ordinary course of business (in each case, including Hedging Obligations on behalf of the Parent or any Subsidiary of the Parent);
(ix9) self-insurance and obligations in respect of performance, bid, appeal and surety bonds, appeal bonds and other similar types of bonds and performance and completion guarantees and similar obligations provided by the Parent or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(10) (i) the incurrence of Indebtedness and the issuance and creation of letters of credit and bankers’ acceptances thereunder by the Toys (Labuan) Holding Limited Group under the Japan Term Loan and Credit Lines and the TRU Asia Credit Lines, each to the extent permitted under Section 4.10(c)(1) and (ii) the incurrence of Indebtedness and the issuance and creation of letters of credit and bankers’ acceptances thereunder by the European ABL Obligors under the European ABL Facility, to the extent permitted under Section 4.10(c)(2), in both of case (i) and (ii), for ordinary course working capital purposes;
(11) any guarantee by the Parent or a Restricted Subsidiary of Indebtedness or other obligations of the Parent or any Restricted Subsidiary so long as the incurrence of such Indebtedness or other obligations incurred by the Parent or such Restricted Subsidiary is permitted under the terms of this Indenture;
(12) the incurrence or issuance by the Parent or any Restricted Subsidiary of Indebtedness, Disqualified Stock or Preferred Stock that serves to refund or refinance any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued as permitted under Section 4.10(b)(2) or (14) hereof, this clause (12) or any Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock, including additional Indebtedness, Disqualified Stock or Preferred Stock incurred or issued to pay accrued interest, premiums and fees and expenses in connection therewith prior to its respective maturity (it being understood that Indebtedness, Disqualified Stock or Preferred Stock of a the Parent or any Restricted Subsidiary owing may be refunded or refinanced by Indebtedness, Disqualified Stock or Preferred Stock of the Parent or any Restricted Subsidiary) (the “Refinancing Indebtedness”); provided 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 Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced, (B) shall not be in a principal amount in excess of the principal amount of, premium, accrued interest on, and related fees and expenses of, the Indebtedness being refunded or refinanced, (C) if the Indebtedness being refunded or refinanced is Subordinated Indebtedness, such Refinancing Indebtedness shall be Subordinated Indebtedness and (D) for avoidance of doubt, shall not include Indebtedness of the Issuer or another its Restricted SubsidiarySubsidiaries that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Parent unless such refinancing is permitted by Section 4.10(c) and 4.07 hereof;
(13) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(14) Additional Notes issued by the Issuer pursuant to the terms of Section 11.01(d)(3);
(15) Indebtedness of the Parent or any Restricted Subsidiary consisting of the financing of insurance premiums in the ordinary course of business or take or pay obligations contained in supply agreements incurred in the ordinary course of business;
(16) Indebtedness of the Parent or any of its Restricted Subsidiaries supported by a letter of credit issued pursuant to the Specified Toys Delaware Facility or Specified Taj Facility or a similar instrument, in a principal amount not in excess of the stated amount of such letter of credit or similar instrument;
(17) [Reserved];
(18) guarantee obligations incurred in the ordinary course of business (including in respect of construction or restoration activities) in respect of trade obligations (or to) suppliers, customers, franchises, lessors and licensees;
(19) Indebtedness or Disqualified Stock of the Parent 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, Disqualified Stock and Preferred Stock then outstanding and incurred pursuant to this clause (19) and does not exceed as of the date of any incurrence pursuant to this clause (19), $25.0 million and any premium, accrued interest on, or related fees and expenses incurred in connection with any refinancing of Indebtedness incurred pursuant to this clause (19);
(20) [Reserved];
(21) Indebtedness attributable to the SALTRU Transaction; provided that and
(x22) if a Guarantor Incurs Indebtedness incurred in connection with any factoring arrangement or issues facility permitted to be incurred under Section 4.10(c)(21).
(c) Notwithstanding any of the foregoing, the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness (including Acquired Indebtedness), and the Issuer will not issue any shares of Disqualified Stock and will not permit any Restricted Subsidiary to issue any shares of Disqualified Stock or Preferred Stock, unless (i) the Issuer or such Restricted Subsidiary is permitted to incur such Indebtedness, Disqualified Stock or Preferred Stock owing pursuant to a Non-Guarantor Subsidiary in excess Section 4.10(b) of $5.0 millionthis Indenture, and (ii) such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right consists of:
(1) The incurrence of payment Indebtedness and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the Guarantee face amount thereof), by the Toys (Labuan) Holding Limited Group, under the TRU Asia Credit Lines and the Japan Term Loan and Credit Lines, up to an aggregate principal amount not to exceed the sum of such Guarantor (x) ¥24.0 billion and (y) HK$285.0 million;
(2) The incurrence of Indebtedness and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), by the European ABL Obligors, under the European ABL Facility, up to an aggregate principal amount (taken together with the amount of Indebtedness incurred under clause (21) below) not to exceed GBP138.0 million at any subsequent issuance or transfer one time outstanding;
(3) Indebtedness of any Capital Stock the Issuer or any other event that results of its Restricted Subsidiaries in respect of (A) the Notes and the Guarantees thereof issued on the Issue Date and (B) any Additional Notes issued pursuant to Section 11.01(d)(3) and the Guarantees thereof;
(4) Indebtedness of the Issuer or any of its Restricted Subsidiary lending such IndebtednessSubsidiaries:
(A) in respect of the 2021 Notes and the guarantees thereof in existence on the Issue Date;
(B) in respect of the France Propco Debt outstanding as of the Issue Date;
(C) in respect of the UK Propco Debt outstanding as of the Issue Date;
(D) in respect of the Propco I Term Loan outstanding on the Issue Date; and
(E) in respect of Capitalized Lease Obligations (including Indebtedness relating to Schedule C Items 10, 11 and 13) outstanding on the Issue Date;
(5) Indebtedness (including Capitalized Lease Obligations), Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary incurred by the Issuer or any other subsequent transfer of its Restricted Subsidiaries to finance the purchase, lease, construction, or improvement of property (real or personal) or equipment that is used or useful in a Permitted Business (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets), in an aggregate principal amount that, when aggregated with the principal amount of all other Indebtedness then outstanding and incurred pursuant to this clause (5) in respect thereof then outstanding (including any Issuer Refinancing Indebtedness in respect of any of the foregoing Indebtedness), does not exceed $15.0 million;
(6) Indebtedness incurred by the Issuer 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, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, Disqualified Stock such obligations are reimbursed within 30 days following such drawing or Preferred Stock incurrence;
(except to 7) Indebtedness arising from agreements of the Issuer or another any of its Restricted Subsidiary) shall be deemedSubsidiaries providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, in each case, to be an Incurrence incurred or assumed in connection with the disposition or acquisition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such Indebtednessbusiness, Disqualified Stock assets or Preferred Stock not permitted a Subsidiary for the purpose of financing such acquisition; provided that in the case of a disposition, the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds including non-cash proceeds (the fair market value of such noncash proceeds being measured at the time received and without giving effect to any subsequent changes in value) actually received by this clause the Issuer and any of its Restricted Subsidiaries in connection with a disposition;
(ix);8) Indebtedness of the Issuer owed to and held by any of its Restri
Appears in 1 contract
Sources: Indenture (Toys R Us Inc)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $700.0 million, (B) the sum of (x) $250.0 million and (iiy) 50.035.0% of Four Quarter EBITDA ACNTA at the time of incurrence and (IIC) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Company and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) issued on the Issue Date and the Guarantees thereof);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Finance Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 90.0 million and (by) 7.04.5% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from (a) Permitted Intercompany Activities and (b) agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a Non-Restricted Subsidiary that is not a Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor and owing to a Restricted Subsidiary that is not a Guarantor, is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor to the extent permitted by applicable law and (y) it does not result in adverse tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer Company or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock in an aggregate principal amount or Preferred Stock ceasing liquidation preference up to be a Restricted Subsidiary 100% of the net cash proceeds received by the Company since immediately after the Start Date from the issue or any other subsequent transfer sale of any such Indebtedness, Disqualified Stock Equity Interests of the Company or Preferred Stock (except cash contributed to the Issuer or another Restricted Subsidiary) shall be deemed, capital of the Company (in each case, to be an Incurrence other than Excluded Contributions, proceeds of such Indebtedness, Disqualified Stock or Preferred Stock sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) to the extent such net cash proceeds or cash have not permitted by this clause been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(a) or to make Permitted Investments specified in clauses (ix10);, (12) or (21) of the definition thereof, and
Appears in 1 contract
Sources: Indenture (Vine Energy Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $250.0 million 2,000.0 million, (B) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrence and (iiC) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Company and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) Notes issued on after the Issue Date and the Guarantees thereofDate);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Finance Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 350.0 million and (by) 7.04.5% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from (a) Permitted Intercompany Activities or (b) agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a Non-Restricted Subsidiary that is not a Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse Tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor and owing to a Restricted Subsidiary that is not a Guarantor, is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor to the extent permitted by applicable law and (y) it does not result in adverse Tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer Company or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock in an aggregate principal amount or Preferred Stock ceasing liquidation preference up to be a Restricted Subsidiary 100% of the net cash proceeds received by the Company since immediately after the Start Date from the issue or any other subsequent transfer sale of any such Indebtedness, Disqualified Stock Equity Interests of the Company or Preferred Stock (except cash contributed to the Issuer or another Restricted Subsidiary) shall be deemed, capital of the Company (in each case, to be an Incurrence other than Excluded Contributions, proceeds of such Indebtedness, Disqualified Stock or Preferred Stock sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) to the extent such net cash proceeds or cash have not permitted by this clause been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(a) or to make Permitted Investments specified in clauses (ix10);, (12) or (21) of the definition thereof, and
Appears in 1 contract
Sources: Indenture (Crescent Energy Co)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Borrower shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Borrower shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary Borrower may Incur incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock Stock, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “if the Fixed Charge Coverage Ratio Debt”of the Borrower would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Test Period.
(b) The foregoing limitations will provisions of Section 6.3(a) shall not apply to (collectively, “Permitted Debt”):
to: (i) the Incurrence incurrence of Indebtedness under Credit Facilities (including the incurrence of the Obligations under this Agreement) by the Issuer Borrower or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) not to exceed $970.0 million outstanding at any one time plus exceed, except as contemplated by Section 6.3(b)(xvii), the greater of (i) $250.0 175.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00Annualized EBITDA; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Revolving Credit Agreement, the LC Facility and the Existing Notes (not including any Additional NotesExisting Note Guarantee thereof) issued outstanding on the Issue Date and the Guarantees thereof;
Closing Date; (iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or and Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer Borrower issued or owing to a any Restricted Subsidiary and/or of any Restricted Subsidiary issued or owing to the Borrower and/or any other Restricted Subsidiary; provided that (x) if any such Indebtedness, Disqualified Stock and Preferred Stock of the Issuer Borrower or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to any Restricted Subsidiary that is not a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect (but only to the Notes or the Guarantee of such Guarantor and (y) extent 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment outstanding at any time after the date that is 30 days after the Closing Date and thereafter only to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not extent permitted by this clause (ixapplicable law and not giving rise to material adverse tax consequences);
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock Stock, and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for the Issuer and its Restricted Subsidiaries, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactionsissued, would be equal have been 2.00 to 1.00 or greater than 2.00 to 1.00(“Ratio Debt”); provided, further, that the aggregate principal amount of Indebtedness, Indebtedness that may be Incurred and Disqualified Stock and or Preferred Stock Incurred or that may be issued pursuant to the foregoing by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of (x) $165.0 225.0 million and 6.0(y) 5.25% of Consolidated Total Assets Assets, at any one time outstanding outstanding, on a Pro Forma Basis (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”including pro forma application of the proceeds therefrom).
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):
(i) the Incurrence or issuance by the Issuer or its Restricted Subsidiaries of (A) Indebtedness or Disqualified Stock or the issuance by its Restricted Subsidiaries of Preferred Stock under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) up to the sum of (I) an aggregate outstanding principal amount not to exceed (1) $970.0 2,050.0 million outstanding at any one time plus outstanding (with any amounts Incurred pursuant to subclause (2) hereof reducing the amount permitted to be Incurred under this subclause (1), with the exception of the greater of (A) $400.0 million and (B) 25% of Consolidated EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, calculated on a Pro Forma Basis) or (2) an unlimited amount so long as the Consolidated Senior Secured Net Debt Ratio does not exceed 4.50 to 1.00 (with any Indebtedness up to the greater of (i) $250.0 400.0 million and (ii) 50.025% of Four Quarter Consolidated EBITDA and (II) an additional aggregate principal amount whichfor the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, after giving calculated on a Pro Forma Effect to such Incurrence Basis, Incurred under subclause (including the use of proceeds thereof1) and any related transactions (or, at the Issuer’s option, hereof on the date of determination (in the initial borrowing same transaction or series of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence transactions) of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Net Debt Ratio to exceed 2.20 to 1.00not being included in the calculation of the Consolidated Senior Secured Net Debt Ratio under this subclause (B) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date); provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes the purpose of calculating the Consolidated Senior Secured Net Debt Ratio in connection with the Incurrence thereof and under this clause (Bi), any outstanding Indebtedness Incurred under this clause (i) Indebtedness outstanding under one or more credit or financing agreements with that is unsecured shall nevertheless be deemed to be secured by a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionLien;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof, as applicable;
(iii) Indebtedness and Disqualified Stock of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) and Preferred Stock of its Restricted Subsidiaries existing on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement described in clause (i) or in respect of the Notes Incurred under Section 3.3(b)(ii(ii) above);
(iv) (i) Indebtedness (including including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock arising from the conversion of the obligations of the Issuer or Preferred Stock issued any Restricted Subsidiary under or pursuant to this clause (iv) (for any “synthetic lease” transactions to on-balance sheet Indebtedness of the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (ax) $195.0 250.0 million and (by) 7.05.00% of Consolidated Total Assets Assets, at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (ix) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (iiy) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock the Incurrence of Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, assets or a Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or an issuance of such Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 millionSubsidiary, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Issuer’s Obligations with respect to this Indenture or the Guarantee of such Guarantor Guarantor, as applicable and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
(x) Swap Contracts or Cash Management Services not Incurred for speculative purposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments) in respect of customs, self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Issuer or any Restricted Subsidiary;
(xii) Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries and Preferred Stock of any of its Restricted Subsidiaries in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $300.0 million and (y) 6.50% of Consolidated Total Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (xii) shall cease to be deemed Incurred, issued or outstanding pursuant to this clause (xii) but shall be deemed Incurred or issued and outstanding as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness or issued such Disqualified Stock or Preferred Stock as Ratio Debt (to the extent any Liens related thereto are Permitted Liens after such reclassification));
(xiii) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness, Disqualified Stock, Preferred Stock or other obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or the issuance of Preferred Stock of a Restricted Subsidiary that serves to refund, refinance, replace, redeem, repurchase, retire or defease, and is in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under Section 3.3(a) or Section 3.3(b)(ii), (iii), (xiv), (xv) or (xviii) or subclause (y) of any of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3(b) or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued to so refund, replace, refinance, redeem, repurchase, retire or defease such Indebtedness, Disqualified Stock or Preferred Stock issued to pay unpaid accrued interest and aggregate amount of premiums (including tender premiums), and underwriting discounts, defeasance costs and fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided that any amounts incurred under this clause (xiv) as Refinancing Indebtedness of Indebtedness originally Incurred pursuant to subclause (y) of any of the above mentioned clauses shall reduce the amount available under such subclause (y) so long as such Refinancing Indebtedness remains outstanding; provided, further, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, redeemed, repurchased or retired;
(2) in the case of any revolving Indebtedness, has a Stated Maturity that is no earlier than the Stated Maturity of the Indebtedness being refunded, refinanced, replaced, redeemed, repurchased or retired;
(3) to the extent that such Refinancing Indebtedness refinances (i) Subordinated Indebtedness, such Refinancing Indebtedness is Subordinated Indebtedness or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, respectively; and
(4) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor, or (y) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; provided that subclauses (1) and (2) will not apply to any refunding or refinancing of any Secured Indebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock (1) of the Issuer or any of its Restricted Subsidiaries Incurred or assumed in anticipation of, or in connection with, an acquisition of any assets (including Capital Stock), business or Person and (2) of any Person that is acquired by the Issuer or any of its Restricted Subsidiaries or merged into or consolidated or amalgamated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger, consolidation or amalgamation and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt; or
(2) the Fixed Charge Coverage Ratio of the Issuer is equal to or greater than immediately prior to such acquisition, merger, consolidation or amalgamation;
(xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(xvii) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to any credit facility permitted hereunder, so long as such letter of credit has not been terminated and is in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;
(xviii) Contribution Indebtedness;
(xix) Indebtedness of the Issuer or any Restricted Subsidiary 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;
(xx) Indebtedness, Disqualified Stock or Preferred Stock of Non-Guarantor Subsidiaries in an aggregate principal amount not to exceed the greater of (x) $300.0 million and (y) 6.50% of Consolidated Total Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (xx) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses Incurred in connection with such refinancing, outstanding at any one time (it being understood that any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (xx) shall cease to
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Borrower shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Borrower shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary Borrower may Incur incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock Stock, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “if the Fixed Charge Coverage Ratio Debt”of the Borrower would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Test Period.
(b) The foregoing limitations will provisions of Section 6.3(a) shall not apply to (collectively, “Permitted Debt”):to:
(i) the Incurrence incurrence of Indebtedness under Credit Facilities (including the incurrence of the Obligations under this Agreement) by the Issuer Borrower or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) not to exceed $970.0 million outstanding at any one time plus exceed, except as contemplated by Section 6.3(b)(xvii), the greater of (i) $250.0 175.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionAnnualized EBITDA;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Existing Notes (not including any Additional NotesExisting Note Guarantee thereof) issued outstanding on the Issue Date and the Guarantees thereofClosing Date;
(iii) Indebtedness, Disqualified Stock and Preferred Stock of the Borrower issued or owing to any Restricted Subsidiary and/or of any Restricted Subsidiary issued or owing to the Borrower and/or any other Restricted Subsidiary; provided that any such Indebtedness, Disqualified Stock and Preferred Stock of the Borrower or a Guarantor owing to any Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Obligations (but only to the extent any such Indebtedness, Disqualified Stock or Preferred Stock is outstanding at any time after the date that is 30 days after the Closing Date and thereafter only to the extent permitted by applicable law and not giving rise to material adverse tax consequences);
(iv) Indebtedness in respect of Permitted Receivables Financings;
(v) Indebtedness, Disqualified Stock and Preferred Stock (1) arising from any agreement providing for indemnification, adjustment of purchase price, earn out or similar obligations (including contingent earn out obligations), in each case, incurred, issued or assumed in connection with any disposition, any acquisition or Investment permitted under this Agreement or consummated prior to the Closing Date or any other purchase of assets or Equity Interests, and (2) arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds, completion bonds or similar instruments securing the performance of the Borrower or any such Restricted Subsidiary pursuant to any such agreement described in the foregoing subclause (1);
(vi) Indebtedness, Disqualified Stock and Preferred Stock of the Borrower and/or any Restricted Subsidiary (1) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, completion, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in the ordinary course of business, consistent with past practice or consistent with industry norm (including relating to any litigation not constituting an Event of Default under Section 7.1(a)(6)) and (2) in respect of letters of credit, bank guaranties, surety bonds, performance bonds, completion bonds or similar instruments to support any of the foregoing items;
(vii) Indebtedness of the Issuer Borrower and/or any Restricted Subsidiary in respect of Banking Services (including Indebtedness owed on a short-term basis to banks and other financial institutions incurred in the ordinary course of business, consistent with past practice or consistent with industry norm that arises in connection with ordinary banking arrangements to manage cash balances of the Borrower and its Restricted Subsidiaries outstanding Subsidiaries) and incentive, supplier finance or similar programs;
(1) guaranties by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the ordinary course of business, consistent with past practice or Incurred consistent with industry norm, (2) Indebtedness incurred in the ordinary course of business, consistent with past practice or consistent with industry norm in respect of obligations of the Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (3) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business, consistent with past practice or consistent with industry norm;
(ix) guarantees of Indebtedness by the Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower or any Restricted Subsidiary with respect to Indebtedness otherwise permitted to be incurred pursuant to the terms of this Agreement or other obligations not prohibited by this Agreement;
(x) Indebtedness of the Borrower and/or any commitment outstanding) on the Issue Date (Restricted Subsidiary existing, or contemplated pursuant to be commitments existing on the Spin-Off Effective Closing Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement described in clause (i) or in respect of the Notes Incurred under Section 3.3(b)(ii(ii) above);
(ivxi) Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors; provided that, at the time of incurrence or issuance thereof and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of such Indebtedness, Disqualified Stock or Preferred Stock then outstanding pursuant to this clause (xi) (iwhen aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) shall not, except as contemplated by Section 6.3(b)(xvii), exceed an amount equal to the greater of $100.0 million and 25.0% of Annualized EBITDA;
(xii) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business, consistent with past practice or consistent with industry norm;
(xiii) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of (1) the financing of insurance premiums, (2) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business, consistent with past practice or consistent with industry norm, and/or (3) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business, consistent with past practice or consistent with industry norm;
(xiv) Indebtedness (including Capitalized Lease Obligations with respect to Financing Leases and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted SubsidiariesIndebtedness), Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by of the Borrower and/or any Restricted Subsidiaries of the Issuer Subsidiary incurred or issued to finance all or any part of refinance the purchaseacquisition, construction, lease, constructionexpansion, development, design, installation, repair repair, replacement, relocation, renewal, maintenance, upgrade or improvement of property (real or personal), plant or equipment or any other fixed or capital assets asset (whether through the direct purchase of property, equipment or other assets or the Capital Stock Equity Interests of any Person owning such property, equipment or other assets) and (ii) Indebtedness Incurred and Disqualified Stock ); provided that such incurrence or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock issuance is prior to, at the time of or Preferred Stock issued pursuant to this clause (iv) (for within two years after the avoidance completion of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))such acquisition, in an aggregate amount construction, lease, expansion, development, installation, repair, replacement, relocation, renewal, maintenance, upgrade or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstandingimprovement;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vixv) Indebtedness, Disqualified Stock or Preferred Stock arising from agreements (1) of the Issuer Borrower or its a Restricted Subsidiaries providing for indemnificationSubsidiary incurred or issued to finance an acquisition or Investment or (2) of Persons that are acquired by the Borrower or a Restricted Subsidiary or merged into, earn-outs, adjustment of purchase amalgamated with or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection consolidated with the acquisition Borrower or disposition of any business, assets, a Restricted Subsidiary of the Issuer or other Investment in accordance with the terms of this IndentureAgreement (including designating an Unrestricted Subsidiary as a Restricted Subsidiary) or that are assumed in connection with an acquisition of assets; provided that after giving pro forma effect to such Investment, acquisition, merger, amalgamation or consolidation, either: (A) the Borrower would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 6.3(a) or (B) the Fixed Charge Coverage Ratio of the Borrower is equal to or greater than immediately prior to such Investment, acquisition, merger, amalgamation or consolidation;
(viixvi) Indebtedness issued by the Borrower or any Restricted Subsidiary to any shareholder of the Borrower or any future, current or former director, officer, employee, member of management, manager, member, partner, independent contractor or consultant (or any Immediate Family Member of the foregoing) of the Borrower or any Subsidiary to finance the purchase or redemption of Equity Interests of the Borrower permitted under Section 6.1;
(xvii) the incurrence or issuance by the Borrower or any of its Restricted Subsidiaries of Indebtedness, Disqualified Stock or Preferred Stock incurred or issued in exchange for or as a replacement of (including by entering into alternative financing arrangements in respect of such exchange or replacement (in whole or in part), by adding or replacing lenders, creditors, agents, Borrowers and/or guarantors, or, after the original instrument giving rise to such Indebtedness, Disqualified Stock or Preferred Stock has been terminated, by entering into any credit agreement, loan agreement, note purchase agreement, indenture or other agreement), or the net proceeds of which are to be used for the purpose of modifying, extending, refinancing, renewing, replacing, redeeming, repurchasing, defeasing, acquiring, amending, supplementing, restructuring, repaying, prepaying, retiring, extinguishing or refunding (collectively, “refinance” with “refinances”, “refinanced” and “refinancing” having a correlative meaning) any Indebtedness (or unutilized commitment in respect of Indebtedness), Disqualified Stock or Preferred Stock incurred or issued as permitted under the first paragraph of this Section 6.3 or any of clauses (i), (ii), (x), (xi), (xiv), (xv), (xvii), (xviii), (xxi), (xxiii), (xxiv), (xxv), (xxxvi), (xli) and (xlii) of this Section 6.3(b) (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness” and such Indebtedness, Disqualified Stock or Preferred Stock being refinanced, the “Refinanced Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided that:
(1) the principal amount (or accreted value, if applicable) of such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Indebtedness outstanding immediately prior to the consummation of such refinancing, except by (A) an amount equal to unpaid accrued interest, dividends and premiums (including tender premiums) thereon plus defeasance costs, underwriting discounts and other fees, commissions and expenses (including upfront fees, closing payments, original issue discount, initial yield payments and similar fees) incurred in connection with the relevant refinancing, (B) an amount equal to any existing commitments unutilized and letters of credit undrawn thereunder and (C) additional amounts permitted to be incurred pursuant to this Section 6.3 (provided that (1) any additional Indebtedness, Disqualified Stock or Preferred Stock referenced in this clause (C) satisfies the other applicable requirements of this clause (xvii) (with additional amounts incurred in reliance on this clause (C) constituting a utilization of the relevant basket or exception pursuant to which such additional amount is permitted) and (2) if such additional Indebtedness is secured, the Lien securing such Refinancing Indebtedness is permitted pursuant to Section 6.6);
(2) solely in the case of Refinancing Indebtedness with respect to Indebtedness, Disqualified Stock or Preferred Stock incurred or issued under Section 6.3(b)(x), (A) such Refinancing Indebtedness either (1) has a final maturity the same as or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) or (2) requires no or nominal payments in cash (other than interest payments) prior to, in each case, the earlier of (x) the final maturity of the Refinanced Indebtedness and (y) the Maturity Date and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Refinanced Indebtedness (without giving effect to any amortization or prepayments in respect of such Refinanced Indebtedness);
(3) such Refinancing Indebtedness shall not include:
(A) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Borrower that is not a Guarantor that refinances Indebtedness or Disqualified Stock of the Borrower;
(B) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of the Borrower that is not a Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of a Guarantor; or
(C) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer Borrower or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such refinances Indebtedness, Disqualified Stock or Preferred Stock owing of an Unrestricted Subsidiary; and
(4) in the case of Refinancing Indebtedness incurred in respect of Indebtedness incurred under Section 6.3(b)(i) or that is secured by Liens on the Collateral that are equal in priority (without regard to control of remedies) with the Obligations, such Refinancing Indebtedness ranks equal or junior in right of payment with the Obligations and is secured by Liens on the Collateral on an equal or junior priority basis with respect to the Obligations or is unsecured; provided that any such Refinancing Indebtedness that is (A) secured by Liens on the Collateral ranking on an equal priority basis (but without regard to control of remedies) with the Obligations shall be subject to an Equal Priority Intercreditor Agreement or (B) secured by Liens on the Collateral ranking junior in priority to the Liens on the Collateral securing the Obligations shall be subject to a Non-Guarantor Subsidiary in excess of $5.0 million, such Junior Priority Intercreditor Agreement;
(xviii) Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee Borrower and/or any Guarantors; provided that, at the time of such Guarantor incurrence or issuance thereof and (y) any subsequent issuance or transfer after giving pro forma effect thereto and the use of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtednessproceeds thereof, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence aggregate principal amount of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by then outstanding pursuant to this clause (ixxviii) (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) shall not, except as contemplated by Section 6.3(b)(xvii);, exceed an amount equal to 100.0% of the net proceeds received by the Borrower since immediately after the Issue Date from the issue or sale of Equity Interests of the Borrower or cash contributed to
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Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock, and any of its Restricted Subsidiaries may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for the Applicable Measurement Period would have been at least 2.00 to 1.00, calculated as determined on a pro forma basis (including a pro forma application of the date on which such net proceeds therefrom), as if the additional Indebtedness is Incurred had been incurred, or such the Disqualified Stock or Preferred Stock is issued had been issued, as the case may be, and determined on a Pro Forma Basis for the Incurrence (including the use application of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that therefrom had occurred at the aggregate principal amount beginning of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Nonsuch four-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”)quarter period.
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness under Credit Facilities by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus not to exceed the greater of (i) $250.0 530.0 million and (ii) 50.0% of Four Quarter Consolidated EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into Issuer for the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionApplicable Measurement Period;
(ii2) the Incurrence incurrence by the Issuer and the Guarantors any Guarantor of Indebtedness represented by the Notes (not including any Guarantee thereof) (other than any Additional Notes, if any, or guarantees with respect thereto);
(3) issued Indebtedness incurred pursuant to the Existing Facilities in an aggregate principal amount at any time outstanding not to exceed the maximum amount available under the terms of each Existing Facility as in effect on the Issue Date and the Guarantees thereofDate;
(iii4) Indebtedness of the Issuer and its the Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or described in respect clauses (1), (2) and (3) of the Notes Incurred under this Section 3.3(b)(ii) above10.11(b));
(iv) (i5) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred Purchase Money Obligations), Disqualified Stock and Preferred Stock incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, expansion, construction, development, replacement, maintenance, upgrade, installation, replacement, repair or improvement of property (real or personal), plant or equipment or any other fixed asset (including, but not limited to, MSRs, Servicing Advances, mortgages or capital other loans, mortgage-related securities or derivatives, consumer receivables, REO Assets, Residual Interests, mortgage-related receivables or other similar assets (or any interests in any of the foregoing)), whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) ; provided that the Liens securing such Indebtedness Incurred and Disqualified Stock or Preferred Stock issued may not extend to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding;
(v) Indebtedness Incurred other property owned by the Issuer or any of its Restricted Subsidiaries at the time the Lien is incurred and the Indebtedness secured by the Lien may not be incurred more than 270 days after the latter of the acquisition or completion of the construction of the property subject to the Lien, provided, further that the amount of such Indebtedness does not exceed the fair market value of the assets developed, constructed, purchased, leased, repaired, maintained, expanded, replaced, upgraded, installed or improved with the proceeds of such Indebtedness;
(6) (a) Indebtedness incurred by the Issuer or any of the Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or credit, bankers’ acceptances, bank guarantees guarantees, warehouse receipts or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditpast practice, including, without limitation, (i) including letters of credit in favor of suppliers or performance trade creditors or surety bonds in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance and (iib) Indebtedness of the Issuer or any of its Restricted Subsidiaries as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by suppliers, customers in connection with the purchase or other acquisition of equipment or supplies creditors issued in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock business or Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection consistent with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiarypast practice; provided that the aggregate principal amount of such Indebtedness under this clause (6)(b), when aggregated with the outstanding amount of Indebtedness under clause (17) of this Section 10.11(b) incurred to refinance Indebtedness initially incurred in reliance on this clause (6)(b), shall not exceed at any one time outstanding the greater of (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor 105.0 million and (y) any subsequent issuance or transfer 10.0% 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 Consolidated EBITDA of any such Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii)for the Applicable Measurement Period at any one time outstanding;
(viii7) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii)Permitted Funding Indebtedness;
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
Appears in 1 contract
Sources: Indenture (Mr. Cooper Group Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock Stock, and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for the Issuer and its Restricted Subsidiaries, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactionsissued, would be equal have been 2.00 to 1.00 or greater than 2.00 to 1.00(“Ratio Debt”); provided, further, that the aggregate principal amount of Indebtedness (including Acquired Indebtedness, ) that may be Incurred and Disqualified Stock and or Preferred Stock Incurred or that may be issued pursuant to the foregoing by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of (x) $165.0 300.0 million and 6.0(y) 5.25% of Consolidated Total Assets Assets, at any one time outstanding outstanding, on a Pro Forma Basis (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”including pro forma application of the proceeds therefrom).
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):
(i) the Incurrence or issuance by the Issuer or its Restricted Subsidiaries of (A) Indebtedness or Disqualified Stock or the issuance by its Restricted Subsidiaries of Preferred Stock under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) up to the sum of (I) an aggregate outstanding principal amount not to exceed (1) $970.0 3,750.0 million outstanding at any one time plus outstanding (with any amounts Incurred pursuant to subclause (2) hereof reducing the amount permitted to be Incurred under this subclause (1), with the exception of the greater of (A) $200.0 million and (B) 25% of Consolidated EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, calculated on a Pro Forma Basis) or (2) an unlimited amount so long as the Consolidated Senior Secured Net Debt Ratio does not exceed 4.25 to 1.00 (with any Indebtedness up to the greater of (i) $250.0 200.0 million and (ii) 50.025% of Four Quarter Consolidated EBITDA and (II) an additional aggregate principal amount whichfor the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, after giving calculated on a Pro Forma Effect to such Incurrence Basis, Incurred under subclause (including the use of proceeds thereof1) and any related transactions (or, at the Issuer’s option, hereof on the date of determination (in the initial borrowing same transaction or series of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence transactions) of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Net Debt Ratio to exceed 2.20 to 1.00not being included in the calculation of the Consolidated Senior Secured Net Debt Ratio under this subclause (B) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date); provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes the purpose of calculating the Consolidated Senior Secured Net Debt Ratio in connection with the Incurrence thereof and under this clause (Bi), any outstanding Indebtedness Incurred under this clause (i) Indebtedness outstanding under one or more credit or financing agreements with that is unsecured shall nevertheless be deemed to be secured by a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionLien;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof, as applicable;
(iii1) Indebtedness and Disqualified Stock of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) and Preferred Stock of its Restricted Subsidiaries existing on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement described in clause (i) or in respect of the Notes Incurred under Section 3.3(b)(ii(ii) above)) and (2) the Existing Unsecured Notes and the guarantees thereof;
(iv) (i) Indebtedness (including including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock arising from the conversion of the obligations of the Issuer or Preferred Stock issued any Restricted Subsidiary under or pursuant to this clause (iv) (for any “synthetic lease” transactions to on-balance sheet Indebtedness of the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (ax) $195.0 300.0 million and (by) 7.05.25% of Consolidated Total Assets Assets, at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (ix) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (iiy) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock the Incurrence of Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, assets or a Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or an issuance of such Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock Stock, and the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for the Issuer and its Restricted Subsidiaries, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactionsissued, would be equal have been 2.00 to 1.00 or greater than 2.00 to 1.00(“Ratio Debt”); provided, further, that the aggregate principal amount of Indebtedness, Indebtedness that may be Incurred and Disqualified Stock and or Preferred Stock Incurred or that may be issued pursuant to the foregoing by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of (x) $165.0 225.0 million and 6.0(y) 5.25% of Consolidated Total Assets Assets, at any one time outstanding outstanding, on a Pro Forma Basis (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”including pro forma application of the proceeds therefrom).
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):
(i) the Incurrence or issuance by the Issuer or its Restricted Subsidiaries of (A) Indebtedness or Disqualified Stock or the issuance by its Restricted Subsidiaries of Preferred Stock under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) up to the sum of (I) an aggregate outstanding principal amount not to exceed (1) $970.0 2,050.0 million outstanding at any one time plus outstanding (with any amounts Incurred pursuant to subclause (2) hereof reducing the amount permitted to be Incurred under this subclause (1), with the exception of the greater of (A) $400.0 million and (B) 25% of Consolidated EBITDA for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, calculated on a Pro Forma Basis) or (2) an unlimited amount so long as the Consolidated Senior Secured Net Debt Ratio does not exceed 4.50 to 1.00 (with any Indebtedness up to the greater of (i) $250.0 400.0 million and (ii) 50.025% of Four Quarter Consolidated EBITDA and (II) an additional aggregate principal amount whichfor the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such date, after giving calculated on a Pro Forma Effect to such Incurrence Basis, Incurred under subclause (including the use of proceeds thereof1) and any related transactions (or, at the Issuer’s option, hereof on the date of determination (in the initial borrowing same transaction or series of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence transactions) of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Net Debt Ratio to exceed 2.20 to 1.00not being included in the calculation of the Consolidated Senior Secured Net Debt Ratio under this subclause (B) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date); provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes the purpose of calculating the Consolidated Senior Secured Net Debt Ratio in connection with the Incurrence thereof and under this clause (Bi), any outstanding Indebtedness Incurred under this clause (i) Indebtedness outstanding under one or more credit or financing agreements with that is unsecured shall nevertheless be deemed to be secured by a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionLien;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof, as applicable;
(iii1) Indebtedness and Disqualified Stock of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) and Preferred Stock of its Restricted Subsidiaries existing on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement described in clause (i) or in respect of the Notes Incurred under Section 3.3(b)(ii(ii) above)) and (2) the Existing Notes and the guarantees thereof;
(iv) (i) Indebtedness (including including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock arising from the conversion of the obligations of the Issuer or Preferred Stock issued any Restricted Subsidiary under or pursuant to this clause (iv) (for any “synthetic lease” transactions to on-balance sheet Indebtedness of the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (ax) $195.0 250.0 million and (by) 7.05.00% of Consolidated Total Assets Assets, at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (ix) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (iiy) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock the Incurrence of Indebtedness arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, assets or a Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or an issuance of such Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 millionSubsidiary, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Issuer’s Obligations with respect to this Indenture or the Guarantee of such Guarantor Guarantor, as applicable and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
(x) Swap Contracts or Cash Management Services not Incurred for speculative purposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments) in respect of customs, self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Issuer or any Restricted Subsidiary;
(xii) Indebtedness or Disqualified Stock of the Issuer or any of its Restricted Subsidiaries and Preferred Stock of any of its Restricted Subsidiaries in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $300.0 million and (y) 6.50% of Consolidated Total Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (xii) shall cease to be deemed Incurred, issued or outstanding pursuant to this clause (xii) but shall be deemed Incurred or issued and outstanding as Ratio Debt from and after the first date on which the Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness or issued such Disqualified Stock or Preferred Stock as Ratio Debt (to the extent any Liens related thereto are Permitted Liens after such reclassification));
(xiii) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness, Disqualified Stock, Preferred Stock or other obligations by the Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture;
(xiv) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or the issuance of Preferred Stock of a Restricted Subsidiary that serves to refund, refinance, replace, redeem, repurchase, retire or defease, and is in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under Section 3.3(a) or Section 3.3(b)(ii), (iii), (xiv), (xv) or (xviii) or subclause (y) of any of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3(b) or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued to so refund, replace, refinance, redeem, repurchase, retire or defease such Indebtedness, Disqualified Stock or Preferred Stock issued to pay unpaid accrued interest and aggregate amount of premiums (including tender premiums), and underwriting discounts, defeasance costs and fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided that any amounts incurred under this clause (xiv) as Refinancing Indebtedness of Indebtedness originally Incurred pursuant to subclause (y) of any of the above mentioned clauses shall reduce the amount available under such subclause (y) so long as such Refinancing Indebtedness remains outstanding; provided, further, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, redeemed, repurchased or retired;
(2) in the case of any revolving Indebtedness, has a Stated Maturity that is no earlier than the Stated Maturity of the Indebtedness being refunded, refinanced, replaced, redeemed, repurchased or retired;
(3) to the extent that such Refinancing Indebtedness refinances (i) Subordinated Indebtedness, such Refinancing Indebtedness is Subordinated Indebtedness or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, respectively; and
(4) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor, or (y) Indebtedness or Disqualified Stock of the Issuer or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; provided that subclauses (1) and (2) will not apply to any refunding or refinancing of any Secured Indebtedness;
(xv) Indebtedness, Disqualified Stock or Preferred Stock (1) of the Issuer or any of its Restricted Subsidiaries Incurred or assumed in anticipation of, or in connection with, an acquisition of any assets (including Capital Stock), business or Person and (2) of any Person that is acquired by the Issuer or any of its Restricted Subsidiaries or merged into or consolidated or amalgamated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition, merger, consolidation or amalgamation and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(1) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt; or
(2) the Fixed Charge Coverage Ratio of the Issuer is equal to or greater than immediately prior to such acquisition, merger, consolidation or amalgamation;
(xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(xvii) Indebtedness of the Issuer or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to any credit facility permitted hereunder, so long as such letter of credit has not been terminated and is in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;
(xviii) Contribution Indebtedness;
(xix) Indebtedness of the Issuer or any Restricted Subsidiary 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;
(xx) Indebtedness, Disqualified Stock or Preferred Stock of Non-Guarantor Subsidiaries in an aggregate principal amount not to exceed the greater of (x) $300.0 million and (y) 6.50% of Consolidated Total Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (xx) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses Incurred in connection with such refinancing, outstanding at any one time (it being understood that any Indebtedness Incurred or Disqualified Stock or Preferred Stock
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Issuers shall not, and will shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuers shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Preferred StockDisqualified Stock or preferred stock; provided, however, that the Issuer and any Restricted Subsidiary Issuers may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary Guarantor (other than any Spectrum Entity) may incur Indebtedness (including Acquired Indebtedness), issue shares of Preferred StockDisqualified Stock and issue shares of preferred stock, in each case if the Fixed Charge Coverage Ratio, calculated as Consolidated Leverage Ratio of the date on which Issuers and the Restricted Subsidiaries at the time such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock preferred stock is issued and would have been no greater than 6.50 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stockpreferred stock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of the most recently ended four full fiscal quarters for which internal financial statements are available.
(b) The foregoing limitations will shall not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence by the Issuer or its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement Issuers and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater of (i) $250.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(ii) the Incurrence by the Issuer and the Guarantors Subsidiary Guarantor of Indebtedness represented by the Second-Priority Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof;
(iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to including any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering MemorandumGuarantee) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) aboveany Additional Second-Priority Notes);
(iv2) Existing Indebtedness (iother than Indebtedness described in Section 1011(b)(1));
(3) Indebtedness (including Capitalized Lease Obligations Obligations), Disqualified Stock and mortgage financings as purchase money obligations) Incurred preferred stock incurred by the Issuer Issuers or any of its Restricted Subsidiariesthe Subsidiary Guarantors (other than any Spectrum Entity), Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair lease or improvement of property (real or personal), plant ) or equipment (other than any Spectrum Assets) that is used or other fixed or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate principal amount or liquidation preferencewhich, including when aggregated with the principal amount of all Indebtedness Incurred and other Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued preferred stock then outstanding and incurred pursuant to this clause (ivSection 1011(b)(3) and including all Refinancing Indebtedness incurred to refund, refinance or replace any other Indebtedness, Disqualified Stock and preferred stock incurred pursuant to this Section 1011(b)(3), does not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding300.0 million;
(v4) Indebtedness Incurred incurred by the Issuer Issuers or any of its Restricted Subsidiaries Subsidiary constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, including without limitation, (i) limitation letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-reimbursement type obligations regarding workers’ compensation claims; provided, healthhowever, disability that upon the drawing of such letters of credit or other employee benefits (whether current the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of businessincurrence;
(vi5) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness arising from agreements of the Issuer Issuers or its a Restricted Subsidiaries Subsidiary providing for and to the extent of (x) indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred 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 that 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 Issuers and the Restricted Subsidiaries in connection with such disposition and (y) working capital or other similar balance sheet related purchase price adjustments incurred or assumed in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenturea Subsidiary;
(vii6) Indebtedness or Disqualified Stock of the Issuer Issuers to a Subsidiary Guarantor; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Subsidiary Guarantor ceasing to be a Subsidiary Guarantor or any other subsequent transfer of any such Indebtedness (except to the Issuers or another Subsidiary Guarantor) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this Section 1011(b)(6);
(7) Indebtedness of the Issuers or a Subsidiary Guarantor to a Restricted SubsidiarySubsidiary that is not a Subsidiary Guarantor; provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and (y) Second-Priority Notes; provided further 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 Indebtedness or Disqualified Stock (except to the Issuer Issuers or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (viiSection 1011(b)(7);
(viiiA) Indebtedness of a Subsidiary Guarantor (other than a Spectrum Entity) to the Issuers or another Subsidiary Guarantor; and
(B) Indebtedness of a Spectrum Entity that is a Subsidiary Guarantor to the Company or another Spectrum Entity that is a Subsidiary Guarantor; provided that any subsequent transfer of any such Indebtedness (except to the Company or another Spectrum Entity that is a Subsidiary Guarantor) shall be deemed, in each case to be an incurrence of such Indebtedness not permitted by this Section 1011(b)(8)(B);
(9) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor to the Issuers or a Restricted Subsidiary;
(10) shares of Preferred Stock preferred stock of a Restricted Subsidiary issued to the Issuer Issuers or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that which results in any 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 preferred stock (except to the Issuer Issuers or another Restricted Subsidiary) shall be deemed, deemed in each case, case to be an issuance of such shares of Preferred Stock preferred stock not permitted by this clause (viiiSection 1011(b)(10);
(ix11) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes) for the purpose of limiting:
(A) interest rate risk with respect to any Indebtedness permitted to be incurred or outstanding under this Second-Priority Indenture; or
(B) exchange rate risk with respect to any currency exchange; or
(C) commodity risk;
(12) obligations in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuers or any Restricted Subsidiary in the ordinary course of business;
(13) Indebtedness of any Subsidiary Guarantor in respect of such Subsidiary Guarantor’s Guarantee;
(14) Indebtedness, Disqualified Stock and preferred stock of the Issuers and the Restricted Subsidiaries not otherwise permitted hereunder in an aggregate principal amount or Preferred Stock liquidation preference which, when aggregated with the principal amount and liquidation preference of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such all other Indebtedness, Disqualified Stock or Preferred Stock owing and preferred stock then outstanding and incurred pursuant to a Non-Guarantor Subsidiary in excess of $5.0 millionthis Section1011(b)(14), such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to does not at any one time outstanding exceed the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);sum of:
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Issuer shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock Stock, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “if either (x) the Fixed Charge Coverage Ratio Debt”of the Issuer would have been at least 1.75 to 1.00 or (y) the Consolidated Total Debt Ratio of the Issuer would be no greater than 6.75 to 1.00, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom)., as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Test Period. The provisions of the first paragraph of this Section 4.09 shall not apply to:
(b) The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(ia) the Incurrence incurrence of Indebtedness under the Credit Facilities by the Issuer or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to clause (q) of the second paragraph of this Section 4.09 in respect of such Indebtedness then outstanding) not to exceed $970.0 million outstanding at any one time plus exceed, except as contemplated by clause (q) of the greater second paragraph of this Section 4.09, the sum of (i) $250.0 1,875.0 million and plus (ii) 50.0the greater of $515.0 million and 100.0% of Four Quarter Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recently ended Test Period plus (IIiii) an additional aggregate principal amount whichsuch that, after giving Pro Forma Effect pro forma effect to the incurrence of such Incurrence (including additional amount and the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date application of the initial borrowing proceeds therefrom, the Consolidated Secured Debt Ratio of the Issuer would be no greater than (x) 3.30 to 1.00 or (y) the Consolidated Secured Debt Ratio immediately prior to the incurrence of such Indebtedness or entry into additional amount ; provided that for purposes of determining the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount that may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with incurred under this clause (ia)(iii)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any , all Indebtedness Incurred incurred under clause (II) of this clause (ia)(iii) shall be deemed to be Consolidated Senior Secured Debt Debt;
(b) the incurrence by the Issuer and any Guarantor of Indebtedness represented by (i) the Notes (including any Note Guarantee thereof, whether but excluding any Additional Notes and any Note Guarantees thereof) and (ii) the Existing Notes (including the guarantees thereof), in each case, outstanding on the Issue Date (after giving effect to the consummation of the Transactions);
(c) Indebtedness, Disqualified Stock and Preferred Stock of the Issuer issued or owing to any Restricted Subsidiary and/or of any Restricted Subsidiary issued or owing to the Issuer and/or any other Restricted Subsidiary; provided that any Indebtedness, Disqualified Stock and Preferred Stock of the Issuer or a Guarantor owing to any Restricted Subsidiary that is not so secureda Guarantor is expressly subordinated in right of payment to the Notes (but only to the extent any such Indebtedness, solely Disqualified Stock or Preferred Stock is outstanding at any time after the date that is 30 days after the Issue Date and thereafter only to the extent permitted by applicable law and not giving rise to material adverse tax consequences as determined in good faith by the Issuer);
(d) Indebtedness in respect of Permitted Receivables Financings;
(e) Indebtedness, Disqualified Stock and Preferred Stock (i) arising from any agreement providing for purposes indemnification, adjustment of calculating the Consolidated Senior Secured Debt Ratio purchase price, earn-out or similar obligations (including contingent earn-out obligations), in each case, incurred, issued or assumed in connection with the Incurrence thereof Transactions, any disposition, any acquisition or Investment permitted under this Indenture or consummated prior to the Issue Date or any other purchase of assets or Equity Interests, and (Bii) Indebtedness outstanding under one arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or more credit similar instruments securing the performance of the Issuer or financing agreements with a revolving financing component any such Restricted Subsidiary pursuant to any such agreement described in the foregoing subclause (to the extent of such component) not to exceed at any time outstanding $450.0 millioni);
(f) Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and/or any Restricted Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in the ordinary course of business, consistent with past practice or consistent with industry norm (including relating to any litigation not constituting an Event of Default under Section 6.01(a)(5)) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the Incurrence foregoing items;
(g) Indebtedness of the Issuer and/or any Restricted Subsidiary in respect of Banking Services (including Indebtedness owed on a short term basis to banks and other financial institutions incurred in the ordinary course of business, consistent with past practice or consistent with industry norm that arises in connection with ordinary banking arrangements to manage cash balances of the Issuer and its Restricted Subsidiaries) and incentive, supplier finance or similar programs;
(i) guaranties by the Issuer and/or any Restricted Subsidiary of the obligations of suppliers, customers and licensees in the Guarantors ordinary course of business, consistent with past practice or consistent with industry norm, (ii) Indebtedness incurred in the ordinary course of business, consistent with past practice or consistent with industry norm in respect of obligations of the Issuer and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business, consistent with past practice or consistent with industry norm;
(i) guarantees of Indebtedness represented by the Notes Issuer and/or any Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any Restricted Subsidiary with respect to Indebtedness otherwise permitted to be incurred pursuant to the terms of this Indenture or other obligations not prohibited by this Indenture;
(not including j) Indebtedness of the Issuer and/or any Additional Notes) issued Restricted Subsidiary existing, or pursuant to commitments existing, on the Issue Date and the Guarantees thereof(other than Indebtedness described in clause (a) or (b) above);
(iiik) Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries that are not Guarantors; provided that, at the time of incurrence or issuance thereof and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of such Indebtedness, Disqualified Stock or Preferred Stock then outstanding pursuant to this clause (k) (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to clause (q) of the second paragraph of this Section 4.09 in respect of such Indebtedness then outstanding) shall not, except as contemplated by clause (q) of the second paragraph of this Section 4.09, exceed an amount equal to the greater of $155.0 million and 30.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on for the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above)most recently ended Test Period;
(ivl) Indebtedness of the Issuer and/or any Restricted Subsidiary consisting of obligations owing under incentive, supply, license or similar agreements entered into in the ordinary course of business, consistent with past practice or consistent with industry norm;
(m) Indebtedness of the Issuer and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business, consistent with past practice or consistent with industry norm, and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business, consistent with past practice or consistent with industry norm;
(n) Indebtedness (including Capitalized Lease Obligations with respect to Financing Leases and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted SubsidiariesIndebtedness), Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer and/or any Restricted Subsidiary incurred or issued to finance all or any part of the purchaseacquisition, construction, lease, constructionexpansion, development, installation, repair repair, replacement, relocation, renewal, maintenance, upgrade or improvement of property (real or personal), plant or equipment or any other fixed or capital assets asset (whether through the direct purchase of property, equipment or other assets or the Capital Stock of any Person owning such property, equipment or other assets); provided that, at the time of incurrence or issuance thereof and after giving pro forma effect thereto and the use of the proceeds thereof, the aggregate principal amount of such Indebtedness, Disqualified Stock and Preferred Stock then outstanding pursuant to this clause (n) (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to clause (q) of the second paragraph of this Section 4.09 in respect of such Indebtedness then outstanding) shall not, except as contemplated by clause (q) of the second paragraph of this Section 4.09, exceed an amount equal to the sum of (i) the greater of $260.0 million and 50.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recently ended Test Period plus (ii) an additional amount, such that after giving pro forma effect to the incurrence of such additional amount and the application of the proceeds therefrom, the Consolidated Secured Debt Ratio of the Issuer would be no greater than 3.30 to 1:00; provided that all Indebtedness Incurred and incurred under this clause (ii) shall be deemed to be Consolidated Secured Debt;
(o) Indebtedness, Disqualified Stock or Preferred Stock (x) of the Issuer or a Restricted Subsidiary incurred or issued to Refinance finance an acquisition or Investment or (y) of Persons that are acquired by the Issuer or a Restricted Subsidiary or merged into, amalgamated with or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of this Indenture (including designating an Unrestricted Subsidiary as a Restricted Subsidiary) or that are assumed in connection with an acquisition of assets, up to an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness Incurred and Disqualified Stock or Preferred Stock issued incurred pursuant to clause (q) of the second paragraph of this Section 4.09 in respect of such Indebtedness then outstanding) not to exceed, except as contemplated by clause (q) of the second paragraph of this Section 4.09, the sum of (1)(A) for purposes of clause (x) only, the greater of $80.0 million and 15.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recently ended Test Period and (B) for purposes of clause (y) only, the greater of $80.0 million and 15.0% of Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the most recently ended Test Period plus (2) an additional amount such that, after giving pro forma effect to such incurrence and such Investment, acquisition, merger, amalgamation or consolidation, either:
(a) (i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of this Section 4.09 or (ii) the Fixed Charge Coverage Ratio of the Issuer is equal to or greater than immediately prior to such Investment, acquisition, merger, amalgamation or consolidation;
(i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Total Debt Ratio test set forth in the first paragraph of this Section 4.09 or (ii) the Consolidated Total Debt Ratio of the Issuer is equal to or less than immediately prior to such Investment, acquisition, merger, amalgamation or consolidation; or
(i) the Issuer would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated Secured Debt Ratio test set forth in clause (a) of the second paragraph of this Section 4.09 or (ii) the Consolidated Secured Debt Ratio of the Issuer is equal to or less than immediately prior to such Investment, acquisition, merger, amalgamation or consolidation; provided, all Indebtedness incurred under this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(ic) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued be deemed to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstandingbe Consolidated Secured Debt;
(vp) Indebtedness Incurred issued by the Issuer or any Restricted Subsidiary to any shareholder of any Parent Company or Equityholding Vehicle or any future, current or former director, officer, employee, member of management, manager, member, partner, independent contractor or consultant (or any Immediate Family Member of the foregoing) of any Parent Company, any Equityholding Vehicle, the Issuer or any Subsidiary to finance the purchase or redemption of Equity Interests of the Issuer, any Parent Company or any Equityholding Vehicle permitted under Section 4.07;
(q) the incurrence or issuance by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock arising from agreements incurred or issued in exchange for or as a replacement of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, (including by entering into alternative financing arrangements in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is subordinated in right of payment to the Issuer’s Obligations with respect to the Notes or the Guarantee of such Guarantor and exchange or replacement (y) any subsequent issuance in whole or transfer of any Capital Stock in part), by adding or any other event which results in any such Restricted Subsidiary ceasing replacing lenders, creditors, agents, borrowers and/or guarantors, or, after the original instrument giving rise to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing has been terminated, by entering into any credit agreement, loan agreement, note purchase agreement, indenture or other agreement), or the net proceeds of which are to be used for the purpose of modifying, extending, refinancing, renewing, replacing, redeeming, repurchasing, defeasing, acquiring, amending, supplementing, restructuring, repaying, prepaying, retiring, extinguishing or refunding (collectively, “refinance” with “refinances,” “refinanced” and “refinancing” having a Non-Guarantor Subsidiary correlative meaning) any Indebtedness (or unutilized commitment in excess respect of $5.0 millionIndebtedness), Disqualified Stock or Preferred Stock incurred or issued as permitted under the first paragraph of this Section 4.09 or any of clauses (a), (b), (j), (k), (n), (o), (q), (r), (u), (y), (bb), (hh), (jj), (kk), (ll), (nn), (oo) or (pp) of the second paragraph of this Section 4.09 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness” and such Indebtedness, Disqualified Stock or Preferred Stock is subordinated being refinanced, the “Refinanced Indebtedness”) and any subsequent Refinancing Indebtedness in right respect thereof; provided that:
(i) the principal amount (or accreted value, if applicable) of payment such Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Indebtedness outstanding immediately prior to the Guarantee consummation of such Guarantor refinancing, except by (A) an amount equal to unpaid accrued interest, dividends and premiums (including tender premiums) thereon plus defeasance costs, underwriting discounts and other fees, commissions and expenses (including upfront fees, closing payments, original issue discount, initial yield payments and similar fees) incurred in connection with the relevant refinancing, (B) an amount equal to any existing commitments unutilized and letters of credit undrawn thereunder and (yC) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing additional amounts permitted to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock incurred pursuant to this Section 4.09 (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
Appears in 1 contract
Sources: Indenture (Covanta Holding Corp)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a1) The Dutch Co-Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock Stock, and (2) the Dutch Co-Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Dutch Co-Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for the Dutch Co-Issuer, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactionsissued, would be equal have been 2.00 to 1.00 or greater than 2.00 to 1.00(“Ratio Debt”); provided, further, that the aggregate principal amount of Indebtedness (including Acquired Indebtedness, ) Incurred and Disqualified Stock and or Preferred Stock Incurred or issued pursuant to the foregoing by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of (x) $165.0 150.0 million and 6.0(y) 13.50% of Total Assets Consolidated Net Tangible Assets, at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”)outstanding.
(b) The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(i) the Incurrence or issuance by the Dutch Co-Issuer or its Restricted Subsidiaries of (A) Indebtedness or Disqualified Stock or the issuance by its Restricted Subsidiaries of Preferred Stock under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) up to the sum of (I) an aggregate outstanding principal amount or liquidation preference, if applicable, not to exceed (x) the sum of (1) $970.0 1,400.0 million outstanding at any one time outstanding plus the greater Cash Capped Grower Amount (with any amounts Incurred pursuant to subclause (y) hereof reducing the amount permitted to be Incurred under this subclause (x)(1), with the exception of the Cash Capped Grower Amount) and (i2) $250.0 million and at any one time outstanding or (ii) 50.0% of Four Quarter EBITDA and (IIy) an additional aggregate principal unlimited amount which, after giving Pro Forma Effect so long as the Consolidated Senior Secured Net Debt Ratio does not exceed 4.50 to such Incurrence 1.00 (including with any Indebtedness up to the use of proceeds thereofCash Capped Grower Amount Incurred under subclause (x) and any related transactions (or, at the Issuer’s option, hereof on the date of determination (in the initial borrowing same transaction or series of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence transactions) of the entire committed amount Consolidated Senior Secured Net Debt Ratio not being included in the calculation of the Consolidated Senior Secured Net Debt Ratio under this subclause (y) on such Indebtedness and date but not, for the avoidance of doubt, excluded from any related transactions such calculation made on any such subsequent date); provided that solely for the purpose of calculating the Consolidated Senior Secured Net Debt Ratio under this clause (such committed amount, a “Ratio Tested Committed Amount”), i) (other than as set forth in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, the parenthetical in whole or in part, from time to time, without further compliance with subclause (y) of this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness outstanding Indebtedness, Disqualified Stock and Preferred Stock Incurred under clause (II) of this clause (i) shall ), shall, in each case, be deemed to be Consolidated Senior Secured Debt Indebtedness irrespective of whether such Indebtedness, whether Disqualified Stock or not so secured, solely for purposes of calculating the Preferred Stock actually constitutes Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionIndebtedness;
(ii) the Incurrence by the Issuer Issuers and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof, as applicable;
(iii) Indebtedness and Disqualified Stock of the Dutch Co-Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) and Preferred Stock of its Restricted Subsidiaries existing on the Issue Date (excluding Indebtedness described in clause (i) or contemplated (ii) above that is Incurred or existing (or deemed to be Incurred or existing) on the Issue Date, but, for the avoidance of doubt, including all Capitalized Lease Obligations (after giving effect to IFRS 16) existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) aboveIssue Date);
(iv) (i) Indebtedness (including including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Dutch Co-Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Dutch Co-Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Indebtedness, Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock arising from the conversion of the obligations of the Dutch Co-Issuer or Preferred Stock issued any Restricted Subsidiary under or pursuant to this clause (iv) (for any “synthetic lease” transactions to on-balance sheet Indebtedness of the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))Dutch Co-Issuer or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (ax) $195.0 75.0 million and (by) 7.06.75% of Total Assets Consolidated Net Tangible Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (iv) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (iv) shall cease to be deemed Incurred or outstanding pursuant to this clause (iv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which the Dutch Co-Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent the Dutch Co-Issuer or such Restricted Subsidiary is able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(v) Indebtedness Incurred or Disqualified Stock issued by the Dutch Co-Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (ix) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (iiy) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) the Incurrence of Indebtedness, Disqualified Stock or Preferred Stock arising from agreements of the Dutch Co-Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred in connection with the Transactions or with the acquisition or disposition of any business, assets, assets or a Subsidiary of the Dutch Co-Issuer or other Investment in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred or Disqualified Stock or Preferred Stock issued by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Dutch Co-Issuer to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the Issuer’s Issuers’ Obligations with respect to the Notes this Indenture or the Guarantee of such Guarantor the Guarantors with respect to the Obligations under this Indenture and (y) 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 Indebtedness or Disqualified Stock (except to the Dutch Co-Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or an issuance of such Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Dutch Co-Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 Dutch Co-Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Dutch Co-Issuer or another Restricted Subsidiary; provided that (x) if the U.S. Co-Issuer or a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 millionSubsidiary, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Issuers’ Obligations with respect to this Indenture or the Guarantee of such Guarantor Guarantor, as applicable, and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock (except to the Dutch Co-Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix);
(x) Swap Contracts or Cash Management Services not Incurred for speculative purposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments) in respect of customs, self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by the Dutch Co-Issuer or any Restricted Subsidiary;
(xii) Indebtedness or Disqualified Stock of the Dutch Co-Issuer or any of its Restricted Subsidiaries and Preferred Stock of any of its Restricted Subsidiaries in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $175.0 million and (y) 15.75% of Consolidated Net Tangible Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness, Disqualified Stock or Preferred Stock permitted under this clause (xii) or any portion thereof, the aggregate amount of accrued and unpaid interest, original issue discount, premiums (including tender premiums), underwriting discounts, defeasance costs and fees and expenses in connection therewith, incurred in connection with such refinancing (it being understood that any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued pursuant to this clause (xii) shall cease to be deemed Incurred, issued or outstanding pursuant to this clause (xii) but shall be deemed Incurred or issued and outstanding as Ratio Debt from and after the first date on which the Dutch Co-Issuer or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness or issued such Disqualified Stock or Preferred Stock as Ratio Debt (to the extent the Dutch Co-Issuer or such Restricted Subsidiary is able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(xiii) any guarantee by the Dutch Co-Issuer or a Restricted Subsidiary of Indebtedness, Disqualified Stock, Preferred Stock or other obligations of the Dutch Co-Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness, Disqualified Stock, Preferred Stock or other obligations by the Dutch Co-Issuer or such Restricted Subsidiary is permitted under the terms of this Indenture;
(xiv) the Incurrence by the Dutch Co-Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or the issuance of Preferred Stock of a Restricted Subsidiary that serves to refund, refinance, replace, redeem, repurchase, retire or defease, and is in an aggregate principal amount (or, if issued with original issue discount, an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under clause (ii), clause (iii), this clause (xiv), clause (xv) or clause (xviii) of this Section 3.3(b) or subclause (y) of each of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3(b) (provided that any amounts Incurred under this clause (xiv) as Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to subclause (y) of any of these clauses shall reduce the amount available under such subclause
Appears in 1 contract
Sources: Indenture (Atotech LTD)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $250.0 million 2,000.0 million, (B) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrence and (iiC) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Company and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) Notes issued on after the Issue Date and the Guarantees thereofDate);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Finance Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 325.0 million and (by) 7.04.5% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from (a) Permitted Intercompany Activities or (b) agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a Non-Restricted Subsidiary that is not a Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse Tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor and owing to a Restricted Subsidiary that is not a Guarantor, is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor to the extent permitted by applicable law and (y) it does not result in adverse Tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer Company or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock in an aggregate principal amount or Preferred Stock ceasing liquidation preference up to be a Restricted Subsidiary 100% of the net cash proceeds received by the Company since immediately after the Start Date from the issue or any other subsequent transfer sale of any such Indebtedness, Disqualified Stock Equity Interests of the Company or Preferred Stock (except cash contributed to the Issuer or another Restricted Subsidiary) shall be deemed, capital of the Company (in each case, to be an Incurrence other than Excluded Contributions, proceeds of such Indebtedness, Disqualified Stock or Preferred Stock sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) to the extent such net cash proceeds or cash have not permitted by this clause been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(a) or to make Permitted Investments specified in clauses (ix10);, (12) or (21) of the definition thereof, and
Appears in 1 contract
Sources: Indenture (Crescent Energy Co)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Borrower shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Borrower shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary Borrower may Incur incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock Stock, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “if the Fixed Charge Coverage Ratio Debt”of the Borrower would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Test Period.
(b) The foregoing limitations will provisions of Section 6.3(a) shall not apply to (collectively, “Permitted Debt”):
to: (i) the Incurrence incurrence of Indebtedness under Credit Facilities by the Issuer Borrower or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) not to exceed $970.0 million outstanding at any one time plus exceed, except as contemplated by Section 6.3(b)(xvii), the greater of (i) $250.0 175.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00Annualized EBITDA; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 million;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the obligations under the Credit Agreement and the Existing Notes (not including any Additional NotesExisting Note Guarantee thereof) issued outstanding on the Issue Date and the Guarantees thereof;
Closing Date; (iii) Indebtedness of the Issuer and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstanding;
(v) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or and Preferred Stock arising from agreements of the Issuer or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indenture;
(vii) Indebtedness or Disqualified Stock of the Issuer Borrower issued or owing to a any Restricted Subsidiary and/or of any Restricted Subsidiary 95 1094001.08-CHISR01A - MSW issued or owing to the Borrower and/or any other Restricted Subsidiary; provided that (x) if any such Indebtedness, Disqualified Stock and Preferred Stock of the Issuer Borrower or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to any Restricted Subsidiary that is not a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect (but only to the Notes or the Guarantee of such Guarantor and (y) extent 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment outstanding at any time after the date that is 30 days after the Closing Date and thereafter only to the Guarantee extent permitted by applicable law and not giving rise to material adverse tax consequences); (iv) Indebtedness in respect of such Guarantor and Permitted Receivables Financings; (yv) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or and Preferred Stock (except to the Issuer 1) arising from any agreement providing for indemnification, adjustment of purchase price, earn out or another Restricted Subsidiary) shall be deemedsimilar obligations (including contingent earn out obligations), in each case, incurred, issued or assumed in connection with any disposition, any acquisition or Investment permitted under this Agreement or consummated prior to be an Incurrence the Closing Date or any other purchase of assets or Equity Interests, and (2) arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds, completion bonds or similar instruments securing the performance of the Borrower or any such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause Restricted Subsidiary pursuant to any such agreement described in the foregoing subclause (ix1);; (vi)
Appears in 1 contract
Sources: Uncommitted Letter of Credit and Reimbursement Agreement (New Fortress Energy Inc.)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer Company will not, and will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or otherwise become directly or indirectly, Incur liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Company will not issue any shares of Disqualified Stock and the Issuer will not permit any Restricted Subsidiary to issue any shares of its Disqualified Stock or permit any Restricted Subsidiaries Subsidiary that is not a Guarantor to issue any shares of Preferred Stock; provided, however, provided that the Issuer and any Restricted Subsidiary Company may Incur incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock Stock, and any Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as Ratio of the Company for the Company’s most recently ended Test Period preceding the date on which such additional Indebtedness is Incurred incurred or such Disqualified Stock or Preferred Stock is issued and would have been at least 2.00 to 1.00, determined on a Pro Forma Basis for the Incurrence pro forma basis (including a pro forma application of the use of net proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(Btherefrom), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing as if the additional Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of had been incurred, or the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred StockStock had been issued, “Ratio Debt”)as the case may be, and the application of proceeds therefrom had occurred at the beginning of such Test Period.
(b) The foregoing limitations Section 4.09(a) will not apply to (collectively, “Permitted Debt”):to:
(i1) the Incurrence incurrence of Indebtedness pursuant to Credit Facilities by the Issuer Company or its any Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof Subsidiary and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) in an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater greatest of (iA) $250.0 million 1,500.0 million, (B) 35.0% of Adjusted Consolidated Net Tangible Assets at the time of incurrence and (iiC) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, Borrowing Base at the Issuer’s option, on the date time of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00incurrence; provided that any Indebtedness Incurred incurred under clause this Section 4.09(b)(1) may be extended, replaced, refunded, refinanced, renewed or defeased (IIincluding through successive extensions, replacements, refundings, refinancings, renewals and defeasances) with new Indebtedness so long as the principal amount (or accreted value, if applicable) of this clause such new Indebtedness does not exceed the sum of (ix) shall be deemed the principal amount (or accreted value, if applicable) of the Indebtedness being so extended, replaced, refunded, refinanced, renewed or defeased (and with respect to Indebtedness under Designated Revolving Commitments, including an amount equal to any unutilized Designated Revolving Commitments being refinanced to the extent permanently terminated at the time of incurrence of such Refinancing Indebtedness), plus (y) any accrued and unpaid interest on the Indebtedness being refinanced, plus (z) the amount of any tender premium or penalty or premium required to be Consolidated Senior Secured Debt paid under the terms of the instrument or documents governing such refinanced Indebtedness and any defeasance costs and any fees and expenses (including original issue discount, whether upfront fees or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio similar fees) incurred in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent incurrence of such component) not to exceed at any time outstanding $450.0 millionnew Indebtedness or the extension, replacement, refunding, refinancing, renewal or defeasance of such refinanced Indebtedness;
(ii2) the Incurrence incurrence by the Issuer Company and the Guarantors any Guarantor of Indebtedness represented by the Notes and related Guarantees (not including but excluding any Additional Notes) Notes issued on after the Issue Date and the Guarantees thereofDate);
(iii3) the incurrence of Indebtedness of by the Issuer Company and its any Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) Subsidiary in existence on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as excluding Indebtedness described in the Offering MemorandumSections 4.09(b)(1) and (other than Indebtedness under the New Credit Agreement or in respect of the Notes Incurred under Section 3.3(b)(ii) above2));
(iv4) (ia) the incurrence of Attributable Indebtedness and (b) Indebtedness (including Capitalized Finance Lease Obligations and mortgage financings as purchase money obligationsPurchase Money Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, and Disqualified Stock incurred or issued by the Issuer Company or any of its Restricted Subsidiaries Subsidiary and Preferred Stock issued by any Restricted Subsidiaries of the Issuer Subsidiary to finance all or any part of the purchase, lease, expansion, construction, installation, replacement, repair or improvement of property (real or personal), plant or equipment or other fixed assets, including assets that are used or capital assets (useful in a Similar Business, whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) assets in an aggregate principal amount, together with any Refinancing Indebtedness in respect thereof and (ii) Indebtedness Incurred and all other Indebtedness, Disqualified Stock or and/or Preferred Stock incurred or issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to outstanding under this clause (iv4) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv)at such time, not to exceed (as of the date such Indebtedness, Disqualified Stock and/or Preferred Stock is issued, incurred or otherwise obtained) the greater of (ax) $195.0 250.0 million and (by) 7.04.5% of Total Adjusted Consolidated Net Tangible Assets at any one the time outstandingof incurrence;
(v5) Indebtedness Incurred incurred by the Issuer Company or any of its Restricted Subsidiaries Subsidiary (a) constituting reimbursement obligations with respect to letters of credit or credit, bank guarantees guarantees, banker’s acceptances, warehouse receipts, or similar instruments issued or entered into, or relating to obligations or liabilities incurred, in the ordinary course of business or consistent with respect to the Existing Bilateral Letter of Creditindustry practice, including, without limitation, (i) letters of credit or performance or surety bonds including in respect of workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, unemployment insurance or other social security legislation, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, performance, completion or surety bonds, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and or self-insurance or (iib) as an account party in respect of letters of credit, bank guarantees or similar instruments in favor of Indebtedness Incurred by customers in connection with the purchase suppliers, trade creditors or other acquisition of equipment Persons issued or supplies incurred in the ordinary course of businessbusiness or consistent with industry practice;
(vi6) Indebtedness, Disqualified Stock or Preferred Stock the incurrence of Indebtedness arising from (a) Permitted Intercompany Activities or (b) agreements of the Issuer Company or its any Restricted Subsidiaries Subsidiary providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting earnouts or similar obligations and other Contingent Obligationsobligations, in each case, Incurred incurred or assumed in connection with the any Investment or any acquisition or disposition of any business, assetsassets 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 the Issuer or other Investment in accordance with the terms of this Indenturefinancing such acquisition;
(vii7) the incurrence of Indebtedness by the Company and owing to a Restricted Subsidiary or the issuance of Disqualified Stock of the Issuer Company to a Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to any Restricted Subsidiary); provided that (x) if the Issuer or a Guarantor Incurs or issues any such Indebtedness or Disqualified Stock for borrowed money owing to a Non-Restricted Subsidiary that is not a Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is expressly subordinated in right of payment to the Issuer’s Obligations with respect Notes to the Notes extent permitted by applicable law and it does not result in adverse Tax consequences; provided, further, that 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 other subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Company or another Restricted Subsidiary or any pledge of such Indebtedness or Disqualified Stock constituting a Permitted Lien) will be deemed, in each case, to be an incurrence of such Indebtedness (to the extent such Indebtedness is then outstanding) or issuance of such Disqualified Stock (to the extent such Disqualified Stock is then outstanding) not permitted by this clause (7);
(8) the incurrence of Indebtedness of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that any such Indebtedness for borrowed money incurred by a Guarantor and owing to a Restricted Subsidiary that is not a Guarantor, is expressly subordinated in right of payment to the Guarantee of the Notes of such Guarantor to the extent permitted by applicable law and (y) it does not result in adverse Tax consequences; provided, further, 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 such subsequent transfer of any such Indebtedness or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall will be deemed, in each case, to be an Incurrence incurrence of such Indebtedness or Disqualified Stock (to the extent such Indebtedness is then outstanding) not permitted by this clause (vii)8);
(viii9) the issuance of shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer Company or another Restricted Subsidiary (or to any Parent Company which is substantially contemporaneously transferred to the Company or any Restricted Subsidiary); provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any such Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary or Disqualified Stock ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer Company or another Restricted SubsidiarySubsidiary or any pledge of such Preferred Stock or Disqualified Stock constituting a Permitted Lien) shall will be deemed, in each case, to be an issuance of such shares of Preferred Stock or Disqualified Stock (to the extent such Preferred Stock or Disqualified Stock is then outstanding) not permitted by this clause (viii9);
(ix10) the incurrence of Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);
(11) the incurrence of obligations in respect of self-insurance and obligations in respect of performance, bid, appeal and surety bonds and performance, banker’s acceptance facilities and completion guarantees and similar obligations provided by the Company or any Restricted Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with industry practice, including those incurred to secure health, safety and environmental obligations;
(12) (a) Indebtedness or Disqualified Stock of the Company and Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer Company or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock in an aggregate principal amount or Preferred Stock ceasing liquidation preference up to be a Restricted Subsidiary 100% of the net cash proceeds received by the Company since immediately after the Start Date from the issue or any other subsequent transfer sale of any such Indebtedness, Disqualified Stock Equity Interests of the Company or Preferred Stock (except cash contributed to the Issuer or another Restricted Subsidiary) shall be deemed, capital of the Company (in each case, to be an Incurrence other than Excluded Contributions, proceeds of such Indebtedness, Disqualified Stock or Preferred Stock sales of Equity Interests to the Company or any of its Subsidiaries) as determined in accordance with clauses (3)(B) and (3)(C) of Section 4.07(a) to the extent such net cash proceeds or cash have not permitted by this clause been applied pursuant to such clauses to make Restricted Payments pursuant to Section 4.07(a) or to make Permitted Investments specified in clauses (ix10);, (12) or (21) of the definition thereof, and
Appears in 1 contract
Sources: Indenture (Crescent Energy Co)
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer will Borrower shall not, and will shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) with respect to any Indebtedness (including Acquired Indebtedness) or and the Borrower shall not issue any shares of Disqualified Stock and the Issuer will shall not permit any of its Restricted Subsidiaries Subsidiary to issue any shares of Disqualified Stock or any Restricted Subsidiary that is not a Guarantor to issue Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary Borrower may Incur incur Indebtedness (including Acquired Indebtedness) or and issue shares of Disqualified Stock Stock, and any of its Restricted Subsidiary Subsidiaries may incur Indebtedness (including Acquired Indebtedness), and issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal to or greater than 2.00 to 1.00; provided, further, that the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of $165.0 million and 6.0% of Total Assets at any one time outstanding (any such Indebtedness, Disqualified Stock or Preferred Stock, “if the Fixed Charge Coverage Ratio Debt”of the Borrower would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of the Test Period.
(b) The foregoing limitations will provisions of Section 6.3(a) shall not apply to (collectively, “Permitted Debt”):to: 126 1223206.01A-CHISR02A1223231.10A-CHISR02A - MSW
(i) the Incurrence incurrence of Indebtedness under Credit Facilities (including the incurrence of the Obligations under this Agreement) by the Issuer Borrower or any of its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), up to the sum of (I) an aggregate outstanding principal amount (when aggregated with the aggregate principal amount of Refinancing Indebtedness incurred pursuant to Section 6.3(b)(xvii) in respect of such Indebtedness then outstanding) not to exceed $970.0 million outstanding at any one time plus exceed, except as contemplated by Section 6.3(b)(xvii), the greater of (i) $250.0 175.0 million and (ii) 50.0% of Four Quarter EBITDA and (II) an additional aggregate principal amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause the Consolidated Senior Secured Debt Ratio to exceed 2.20 to 1.00; provided that any Indebtedness Incurred under clause (II) of this clause (i) shall be deemed to be Consolidated Senior Secured Debt , whether or not so secured, solely for purposes of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and (B) Indebtedness outstanding under one or more credit or financing agreements with a revolving financing component (to the extent of such component) not to exceed at any time outstanding $450.0 millionAnnualized EBITDA;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Existing Notes (not including any Additional NotesExisting Note Guarantee thereof) issued outstanding on the Issue Date and the Guarantees thereofClosing Date;
(iii) Indebtedness Indebtedness, Disqualified Stock and Preferred Stock of the Issuer and its Restricted Subsidiaries outstanding (Borrower issued or Incurred pursuant owing to any commitment outstanding) on Restricted Subsidiary and/or of any Restricted Subsidiary issued or owing to the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (Borrower and/or any other than Indebtedness under the New Credit Agreement or in respect Restricted Subsidiary; provided that any such Indebtedness, Disqualified Stock and Preferred Stock of the Notes Incurred under Section 3.3(b)(ii) aboveBorrower or a Guarantor owing to any Restricted Subsidiary that is not a Guarantor is expressly subordinated in right of payment to the Obligations (but only to the extent any such Indebtedness, Disqualified Stock or Preferred Stock is outstanding at any time after the date that is 30 days after the Closing Date and thereafter only to the extent permitted by applicable law and not giving rise to material adverse tax consequences);
(iv) (i) Indebtedness (including Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer or any in respect of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and Preferred Stock issued by any Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv) (for the avoidance of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv)), in an aggregate amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance any Indebtedness Incurred and Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (a) $195.0 million and (b) 7.0% of Total Assets at any one time outstandingPermitted Receivables Financings;
(v) Indebtedness Incurred by Indebtedness, Disqualified Stock and Preferred Stock
(1) arising from any agreement providing for indemnification, adjustment of purchase price, earn out or similar obligations (including contingent earn out obligations), in each case, incurred, issued or assumed in connection with any disposition, any acquisition or Investment permitted under this Agreement or consummated prior to the Issuer Closing Date or any other purchase of its Restricted Subsidiaries constituting reimbursement obligations with respect to assets or Equity Interests, and (2) arising from guaranties, letters of credit or credit, bank guarantees guaranties, surety bonds, performance bonds, completion bonds or similar instruments issued securing the performance of the Borrower or any such Restricted Subsidiary pursuant to any such agreement described in the ordinary course of business or with respect to the Existing Bilateral Letter of Credit, including, without limitation, foregoing subclause (i) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (ii) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business1);
(vi) Indebtedness, Disqualified Stock or and Preferred Stock arising from agreements of the Issuer Borrower and/or any Restricted Subsidiary (1) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, completion, stay, customs, appeal, performance and/or return of money bonds or its Restricted Subsidiaries providing for indemnificationother similar obligations incurred in the ordinary course of business, earn-outsconsistent with past practice or consistent with industry norm (including relating to any litigation not constituting an Event of Default under Section 7.1(a)(6)) and (2) in respect of letters of credit, adjustment of purchase or acquisition pricebank guaranties, incentivesurety bonds, non-competeperformance bonds, consulting completion bonds or similar obligations and other Contingent Obligations, in each case, Incurred in connection with the acquisition or disposition of instruments to support any business, assets, Subsidiary of the Issuer or other Investment in accordance with the terms of this Indentureforegoing items;
(vii) Indebtedness or Disqualified Stock of the Issuer to a Borrower and/or any Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess respect of $5.0 millionBanking Services (including Indebtedness owed on a short-term basis to banks and other financial institutions incurred in the ordinary course of business, such Indebtedness consistent with past practice or Disqualified Stock is subordinated consistent with industry norm that arises in right connection with ordinary banking arrangements to manage cash balances of payment to the Issuer’s Obligations with respect to the Notes Borrower and its Restricted Subsidiaries) and incentive, supplier finance or the Guarantee of such Guarantor and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
similar programs; 127 1223206.01A-CHISR02A1223231.10A-CHISR02A - MSW (viii) shares of Preferred Stock of a Restricted Subsidiary issued to (1) guaranties by the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in Borrower and/or any Restricted Subsidiary that holds such shares of Preferred Stock the obligations of another Restricted Subsidiary ceasing to be a Restricted Subsidiary suppliers, customers and licensees in the ordinary course of business, consistent with past practice or any other subsequent transfer consistent with industry norm, (2) Indebtedness incurred in the ordinary course of any such shares business, consistent with past practice or consistent with industry norm in respect of Preferred Stock (except to obligations of the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary; provided that (x) if a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness, Disqualified Stock or Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in Borrower and/or any Restricted Subsidiary lending to pay the deferred purchase price of goods or services or progress payments in connection with such Indebtednessgoods and services and (3) Indebtedness in respect of letters of credit, Disqualified Stock bankers’ acceptances, bank guaranties or Preferred Stock ceasing to be a Restricted Subsidiary similar instruments supporting trade payables, warehouse receipts or any other subsequent transfer similar facilities entered into in the ordinary course of any such Indebtednessbusiness, Disqualified Stock consistent with past practice or Preferred Stock (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock not permitted by this clause (ix)consistent with industry norm;
Appears in 1 contract
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) The Issuer (1) CommScope will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock Stock, and the Issuer (2) CommScope will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer CommScope and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage RatioRatio for CommScope and its Restricted Subsidiaries, calculated as of the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued and determined on a Pro Forma Basis for the Incurrence (including the use of proceeds thereof) and any related transactions, would be equal have been 2.00 to 1.00 or greater than 2.00 to 1.00(“Ratio Debt”); provided, further, that the aggregate principal amount of Indebtedness (including Acquired Indebtedness, ) that may be Incurred and Disqualified Stock and or Preferred Stock Incurred or that may be issued pursuant to the foregoing by Non-Guarantor Subsidiaries pursuant to the foregoing, together with the aggregate principal amount of Indebtedness, Disqualified Stock and Preferred Stock Incurred or issued by Non-Guarantor Subsidiaries under Sections 3.3(b)(xv)(B), 3.3(b)(xx) and 3.3(b)(xxxi) and any Refinancing Indebtedness incurred under Section 3.3(b)(xiv) in respect of any of the foregoing, shall not exceed the greater of (x) $165.0 500 million and 6.0(y) 5.25% of Total Assets Assets, at any one time outstanding outstanding, on a Pro Forma Basis (any such Indebtedness, Disqualified Stock or Preferred Stock, “Ratio Debt”including pro forma application of the proceeds therefrom).
(b) The foregoing limitations will not apply to (collectively, “Permitted Debt”):
(i) the Incurrence by the Issuer CommScope or its Restricted Subsidiaries of (A) Indebtedness under the New Credit Agreement and any other Credit Agreement, the guarantees thereof and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), ) up to the sum of (I) an aggregate outstanding principal amount not to exceed $970.0 million outstanding at any one time plus the greater sum of (i1) (x) $250.0 2,325 million and plus (ii) 50.0% of Four Quarter EBITDA and (IIy) an additional aggregate principal unlimited amount which, after giving Pro Forma Effect to such Incurrence (including the use of proceeds thereof) and any related transactions (or, at the Issuer’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving Pro Forma Effect to the Incurrence of the entire committed amount of such Indebtedness and any related transactions (such committed amount, a “Ratio Tested Committed Amount”), in which case such Ratio Tested Committed Amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (i)) would not cause so long as the Consolidated Senior Secured Debt Ratio does not exceed 3.00 to exceed 2.20 to 1.00; provided that 1.00 (with any Indebtedness Incurred under clause subclause (IIx) hereof on the date of determination of the Consolidated Senior Secured Debt Ratio not being included in the calculation of the Consolidated Senior Secured Debt Ratio under this subclause (y) on such date but not, for the avoidance of doubt, excluded from any such calculation made on any such subsequent date), plus (2) up to an aggregate amount not to exceed at any one time outstanding, the greater of (x) $700 million and (y) the Borrowing Base as of the date of such Incurrence, less, in each case of this clause (i) shall be deemed to be Consolidated Senior Secured Debt 2), whether or not so secured, the aggregate amount under Receivables Financings incurred by a Receivables Subsidiary; provided that solely for purposes the purpose of calculating the Consolidated Senior Secured Debt Ratio in connection with the Incurrence thereof and under this clause (Bi), any outstanding Indebtedness Incurred under this clause (i) Indebtedness outstanding under one that is unsecured or more credit or financing agreements with secured on a revolving financing component (junior basis shall nevertheless be deemed to the extent of such component) not to exceed at any time outstanding $450.0 millionbe secured by a Lien;
(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Notes (not including any Additional Notes) issued on the Issue Date and the Guarantees thereof, as applicable;
(iii) Indebtedness of the Issuer CommScope and its Restricted Subsidiaries outstanding (or Incurred pursuant to any commitment outstanding) existing on the Issue Date (or contemplated to be existing on the Spin-Off Effective Date as described in the Offering Memorandum) (other than Indebtedness under the New Credit Agreement described in clause (i) or in respect of the Notes Incurred under Section 3.3(b)(ii(ii) above);
(iv) (i) Indebtedness (including including, without limitation, Capitalized Lease Obligations and mortgage financings as purchase money obligations) Incurred by the Issuer CommScope or any of its Restricted Subsidiaries, Disqualified Stock issued by the Issuer CommScope or any of its Restricted Subsidiaries and Preferred Stock issued by any of its Restricted Subsidiaries of the Issuer to finance all or any part of the purchase, lease, construction, installation, repair or improvement of property (real or personal), plant or equipment or other fixed or capital assets (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) and (ii) Indebtedness Incurred and Disqualified Stock arising from the conversion of the obligations of CommScope or Preferred Stock issued to Refinance Indebtedness Incurred and Disqualified Stock any Restricted Subsidiary under or Preferred Stock issued pursuant to this clause (iv) (for the avoidance any “synthetic lease” transactions to on-balance sheet Indebtedness of doubt Indebtedness Incurred under another provision of this Section 3.3(b) to Refinance Indebtedness under clause (iv)(i) shall not count toward the cap below in this clause (iv))CommScope or such Restricted Subsidiary, in an aggregate principal amount or liquidation preference, including all Indebtedness Incurred and Disqualified Stock or Preferred Stock issued to Refinance renew, refund, refinance, replace, defease or discharge any Indebtedness Incurred and or Disqualified Stock or Preferred Stock issued pursuant to this clause (iv), not to exceed the greater of (ax) $195.0 350 million and (by) 7.03.75% of Total Assets Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (iv) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (iv) shall cease to be deemed Incurred or outstanding pursuant to this clause (iv) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which CommScope or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent CommScope or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification)); provided that Capitalized Lease Obligations incurred by CommScope or any Restricted Subsidiary pursuant to this clause (iv) in connection with a Sale/Leaseback Transaction shall not be subject to the foregoing limitation so long as the proceeds of such Sale/Leaseback Transaction are used by CommScope or such Restricted Subsidiary to permanently repay outstanding loans under any Credit Agreement or other Indebtedness secured by a Lien on the assets subject to such Sale/Leaseback Transaction;
(v) Indebtedness Incurred by the Issuer CommScope or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments issued in the ordinary course of business or with respect to the Existing Bilateral Letter of Creditbusiness, including, without limitation, (ix) letters of credit or performance or surety bonds in respect of workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance and (iiy) guarantees of Indebtedness Incurred by customers in connection with the purchase or other acquisition of equipment or supplies in the ordinary course of business;
(vi) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness arising from agreements of the Issuer CommScope or its Restricted Subsidiaries providing for indemnification, earn-outs, adjustment of purchase or acquisition price, incentive, non-compete, consulting price or similar obligations and other Contingent Obligationsobligations, in each case, Incurred in connection with the Transactions or the acquisition or disposition of any business, assets, assets or a Subsidiary of the Issuer or other Investment CommScope in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;
(vii) Indebtedness or Disqualified Stock of the Issuer CommScope to a Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness or Disqualified Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Indebtedness or Disqualified Stock is shall be subordinated in right of payment to the IssuerCommScope’s Obligations obligations with respect to the Notes this Indenture or the Guarantee of such Guarantor CommScope with respect to Obligations under this Indenture and (y) 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 Indebtedness or Disqualified Stock (except to the Issuer CommScope or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness or Disqualified Stock not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer CommScope or another Restricted Subsidiary; provided that (x) if a Guarantor issues such Preferred Stock owing to a Non-Guarantor Subsidiary in excess of $5.0 million, such Preferred Stock is subordinated in right of payment to the Guarantee of such Guarantor and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any 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 CommScope or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (viii);
(ix) Indebtedness, Disqualified Stock or Preferred Stock Indebtedness of a Restricted Subsidiary owing to the Issuer CommScope or another Restricted Subsidiary; provided that (x) if the Issuer or a Guarantor Incurs or issues such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness owing to a Non-Guarantor Subsidiary in excess of $5.0 millionSubsidiary, such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness is subordinated in right of payment to the Issuer’s Obligations with respect to this Indenture or the Guarantee of such Guarantor Guarantor, as applicable, and (y) any subsequent issuance or transfer of any Capital Stock or any other event that results in any Restricted Subsidiary lending such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness (except to the Issuer CommScope or another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock Indebtedness not permitted by this clause (ix);
(x) Swap Contracts or Cash Management Services Incurred not for speculative purposes;
(xi) obligations (including reimbursement obligations with respect to letters of credit or bank guarantees or similar instruments) in respect of self-insurance, performance, bid, appeal and surety bonds and completion guarantees and similar obligations provided by CommScope or any Restricted Subsidiary;
(xii) Indebtedness or Disqualified Stock of CommScope or any Restricted Subsidiary and Preferred Stock of any Restricted Subsidiary in an aggregate principal amount or liquidation preference that, when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of (x) $550 million and (y) 5.75% of Total Assets, at any one time outstanding, plus, in the case of any refinancing of any Indebtedness permitted under this clause (xii) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses incurred in connection with such refinancing (it being understood that any Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to this clause (xii) shall cease to be deemed Incurred or outstanding pursuant to this clause (xii) but shall be deemed Incurred and outstanding as Ratio Debt from and after the first date on which CommScope or such Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness, Disqualified Stock or Preferred Stock as Ratio Debt (to the extent CommScope or any of its Restricted Subsidiaries are able to Incur any Liens related thereto as Permitted Liens after such reclassification));
(xiii) any guarantee by CommScope or a Restricted Subsidiary of Indebtedness or other obligations of CommScope or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by CommScope or such Restricted Subsidiary is permitted under the terms of this Indenture;
(xiv) the Incurrence by CommScope or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of CommScope or a Restricted Subsidiary that serves to refund, refinance, replace, redeem, repurchase, retire or defease, and is in an aggregate principal amount (or if issued with original issue discount an aggregate issue price) that is equal to or less than, Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as Ratio Debt or permitted under clause (ii), (iii), this clause (xiv), (xv) or (xviii) of this Section 3.3(b) or subclause (y) of each of clauses (iv), (xii), (xx), (xxix) or (xxx) of this Section 3.3(b) (provided that any amounts incurred under this clause (xiv) as Refinancing Indebtedness of subclause (y) of these clauses shall reduce the amount available under such subclause (y) of such clauses) so long as such Refinancing Indebtedness remains outstanding or any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued to so refund, replace, refinance, redeem, repurchase, retire or defease such Indebtedness, Disqualified Stock or Preferred Stock, plus any additional Indebtedness Incurred or Disqualified Stock or Preferred Stock issued to pay unpaid accrued interest and the aggregate amount of premiums (including reasonable tender premiums), and underwriting discounts, defeasance costs and fees and expenses in connection therewith (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred that is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced, replaced, redeemed, repurchased or retired;
(2) in the case of any revolving Indebtedness, has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded, refinanced, replaced, redeemed, repurchased or retired;
(3) to the extent that such Refinancing Indebtedness refinances (i) Subordinated Indebtedness, such Refinancing Indebtedness is Subordinated Indebtedness or (ii) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, respectively; and
(4) shall not include (x) Indebtedness, Disqualified Stock or Preferred Stock of a Non-Guarantor Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Guarantor, or (y) Indebtedness or Disqualified Stock of CommScope or Indebtedness, Disqualified Stock or Preferred Stock of a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; provided that subclause (1) will not apply to any refunding or refinancing of any Secured Indebtedness;
(xv) (i) Indebtedness, Disqualified Stock or Preferred Stock (x) of CommScope or any of its Restricted Subsidiaries Incurred or assumed in connection with an acquisition of any assets (including Capital Stock), business or Person and (y) of any Person that is acquired by CommScope or any of its Restricted Subsidiaries or merged into or consolidated or amalgamated with CommScope or a Restricted Subsidiary in accordance with the terms of this Indenture and (ii) Indebtedness Incurred or assumed in anticipation of an acquisition of any assets, business or Person; provided, however, that after giving effect to such acquisition, merger, consolidation or amalgamation and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:
(1) CommScope would be permitted to Incur at least $1.00 of additional Indebtedness as Ratio Debt; or
(2) the Fixed Charge Coverage Ratio of CommScope is equal to or greater than immediately prior to such acquisition, merger, consolidation or amalgamation;
(xvi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(xvii) Indebtedness of CommScope or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to any credit facility permitted hereunder, so long as such letter of credit has not been terminated and is in a principal amount not in excess of the stated amount of such letter of credit or bank guarantee;
(xviii) Contribution Indebtedness;
(xix) Indebtedness of CommScope or any Restricted Subsidiary 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;
(xx) Indebtedness or Preferred Stock of Non-Guarantor Subsidiaries in an aggregate principal amount not to exceed the greater of (x) $500 million and (y) 5.25% of Total Assets, at any one time outstanding (it
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