Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock. (b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”): (1) the incurrence by the Company and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon; (2) Indebtedness outstanding or in effect on the Original Issue Date; (3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that: (i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and (ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3); (4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business; (5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business; (6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business; (7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and (8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate. (c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 3 contracts
Sources: Supplemental Indenture, Securities Purchase Agreement, Indenture
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.
(b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence by the Company and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 2 contracts
Sources: Securities Purchase Agreement, Indenture
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock (except for the issuance by the Company of Disqualified Capital Stock (i) which is redeemable at the Company’s option in cash or Qualified Capital Stock and (ii) the dividends on which are payable at the Company’s option in cash or Qualified Capital Stock); provided that the Company and its Restricted Subsidiaries that are Subsidiary Guarantors may incur Indebtedness or issue shares of Disqualified Capital Stock if (1) at the time of such event and after giving effect thereto on a pro forma basis the Consolidated Fixed Charge Coverage Ratio for the four full quarters immediately preceding such event, taken as one period, would have been equal to or greater than 2.25 to 1.0 and (2) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Capital Stock is issued or would occur as a consequence of the incurrence of the additional Indebtedness or the issuance of the Disqualified Capital Stock.
(b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence Revolving Credit Agreement in an aggregate principal amount not in excess of $50,000,000 at any one time outstanding and any guarantee thereof by the Company and the a Subsidiary Guarantors of Guarantor;
(x2) Indebtedness represented by under (a) the Series 1 New 2020 Convertible Notes issued on the Original Issue Date in the Exchange Offer and any Series 1 Consent Solicitation and the Additional New 2020 Convertible Notes issued in connection with the payment of interest thereon, thereon and (yb) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date in the Exchange Offer and any Series 2 Consent Solicitation and the Additional Notes issued in connection with the payment of interest thereon;
(23) Indebtedness outstanding or in effect on the Original Issue DateDate (and not exchanged in connection with the Exchange Offer and Consent Solicitation);
(34) obligations pursuant to Interest Rate Protection Obligations, but only to the extent such obligations do not exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Protection Obligations; obligations under currency exchange contracts entered into in the ordinary course of business; hedging arrangements entered into in the ordinary course of business for the purpose of protecting production, purchases and resales against fluctuations in oil or natural gas prices; and any guarantee of any of the foregoing;
(a) the subsidiary guarantees of the New 2020 Convertible Notes issued on the Issue Date in the Exchange and Consent Solicitation (and any assumption of the obligations guaranteed thereby) and the Additional New 2020 Convertible Notes issued in connection with the payment of interest thereon and (b) the Subsidiary Guarantees of the Notes issued on the Issue Date in the Exchange and Consent Solicitation (and any assumption of obligations guaranteed thereby) and the Additional Notes issued in connection with the payment of interest thereon;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(iI) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Subsidiary Guarantee of such Subsidiary Guarantor; and
(iiII) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (36);
(47) the incurrence by the Company or Permitted Refinancing Indebtedness and any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessguarantee thereof;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business8) Non-Recourse Indebtedness;
(69) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(11) any additional Indebtedness in an aggregate principal amount not in excess of $75,000,000 at any one time outstanding and any guarantee thereof; provided that the Company may issue (and the Subsidiary Guarantors may guarantee) up to $91,875,000 of Additional New Senior Secured Notes under this clause (11) in lieu of paying cash interest of up to $75,000,000 on the New Senior Secured Notes, and any such issuance of Additional New Senior Secured Notes shall reduce (on a dollar for dollar basis) the amount of other Indebtedness that is permitted to be incurred under this clause (11); and
(8) 12) Indebtedness incurred under the New Senior Secured Notes issued on the Issue Date in an aggregate principal amount not to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding exceed $1.0 million in the aggregate700,000,000 and any guarantee thereof by a Subsidiary Guarantor.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of one or more of the categories of Permitted Indebtedness described in clauses (1) through (12) above or is entitled to be incurred pursuant to clause (a) of this Section 4.09, the Company may, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses of the definition of Permitted Indebtedness or the proviso of the foregoing sentence and an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness permitted hereunder; provided that all Indebtedness outstanding on the Issue Date under the Revolving Credit Agreement shall be deemed incurred under Section 4.09(b)(1) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified; provided, further, that all Indebtedness under the New Senior Secured Notes shall be deemed be incurred under Section 4.09(b)(12) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified; provided, further, that all Indebtedness under the New 2020 Convertible Notes (including the Additional New 2020 Convertible Notes) shall be deemed to be incurred under Section 4.02(b)(2)(a) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified.
(d) The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced (plus all accrued interest on the Indebtedness being refinanced and the amount of all expenses and premiums incurred in connection therewith).
(f) The amount of any guarantee by the Company or any Restricted Subsidiary of any Indebtedness of the Company or one or more Restricted Subsidiaries shall not be deemed to be outstanding or incurred for purposes of this Section 4.09 in addition to the amount of Indebtedness which it guarantees.
(g) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
(h) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 2 contracts
Sources: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”Incur,” “Incurrence,” “Incurred” and “Incurring” shall have meanings correlative to the foregoing) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, will not issue any Disqualified Capital Stock and shall will not permit any of its Restricted Subsidiaries to, to issue any Disqualified Capital Stock or Preferred Stock; provided that the Company may Incur Indebtedness (including Acquired Indebtedness) or issue Disqualified Capital Stock, and any Restricted Subsidiary that is a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Capital Stock or Preferred Stock if (1) at the time of such event and after giving effect thereto on a pro forma basis the Consolidated Fixed Charge Coverage Ratio for the four full quarters immediately preceding such event, taken as one period, would have been equal to or greater than 2.25 to 1.0 and (2) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is Incurred or such Disqualified Capital Stock or Preferred Stock is issued or would occur as a consequence of the Incurrence of the additional Indebtedness or the issuance of the Disqualified Capital Stock or Preferred Stock.
(b) Notwithstanding the prohibitions of The restrictions in Section 4.09(a), ) will not prohibit the Company and its Restricted Subsidiaries may incur Incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence by the Company and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date in the Exchange Offer and any Series 1 Additional Notes issued in connection with the payment Consent Solicitation and up to $91,875,000 of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue DateDate (and not exchanged in connection with the Exchange Offer and Consent Solicitation);
(3) (I) obligations pursuant to Interest Rate Protection Obligations, but only to the incurrence extent such obligations do not exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Protection Obligations; (II) obligations under currency exchange contracts entered into in the ordinary course of business; and (III) hedging arrangements entered into in the ordinary course of business for the purpose of protecting production, purchases and resales against fluctuations in oil or natural gas prices, and any guarantee of any of the foregoing;
(4) the Subsidiary Guarantees (and any assumption of the obligations guaranteed thereby) issued in respect of the Notes issued on the Issue Date and with respect to any Additional Notes issued in connection with the payment of interest thereon;
(5) the Incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(iI) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Subsidiary Guarantee of such Subsidiary Guarantor; and
(iiII) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (35);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge, in whole or in part, any Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (1), (2) or clause (11) of this Section 4.09(b) or this clause (6);
(7) Non-Recourse Indebtedness;
(8) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(79) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(10) Indebtedness under the Revolving Credit Agreement in an aggregate principal amount not in excess of $50,000,000 at any one time outstanding and any guarantee thereof by a Subsidiary Guarantor; and
(8) a) Indebtedness incurred under the New 2019 Convertible Notes issued on the Issue Date in an aggregate principal amount not to finance exceed $288,516,000 and any guarantee thereof by a Subsidiary Guarantor; (b) Indebtedness under any Additional New 2019 Convertible Notes and any guarantee thereof by a Subsidiary Guarantor; (c) Indebtedness under the acquisitionNew 2020 Convertible Notes issued on the Issue Date in an aggregate principal amount not to exceed $174,607,000 and any guarantee thereof by a Subsidiary Guarantor, construction, or improvement of fixed or capital assets and (including Capital Lease Obligationsd) not exceeding $1.0 million in the aggregateIndebtedness under any Additional New 2020 Convertible Notes and any guarantee thereof by a Subsidiary Guarantor.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of one or more of the categories of Permitted Indebtedness described in clauses (1) through (11) described above or is entitled to be Incurred pursuant to clause (a) of this Section 4.09, the Company may, in its sole discretion, classify such item of Indebtedness in any Person manner that becomes a Restricted Subsidiary by merger, consolidation complies with this Section 4.09 and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses of the definition of Permitted Indebtedness or other acquisition the proviso of the foregoing sentence and an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness permitted hereunder; provided that all Indebtedness outstanding on the Issue Date under the Revolving Credit Agreement shall be deemed Incurred under Section 4.09(b)(10) and not under Section 4.09(a) or Section 4.09(b)(2) and may not be later reclassified; provided, further, that all Indebtedness under the New Convertible Notes and Additional New Convertible Notes shall be deemed Incurred under Section 4.09(b)(11) and not under Section 4.09(a) or Section 4.09(b)(2) and may not be later reclassified.
(d) The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced (plus all accrued interest on the Indebtedness being refinanced and the amount of all expenses and premiums incurred by in connection therewith).
(f) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company and the or any Restricted Subsidiary at may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the time exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Person becomes a Restricted SubsidiaryPermitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 2 contracts
Sources: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)
Limitation on Indebtedness and Disqualified Stock. (ai) The Company shall Parent Guarantor will not, and shall will not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) Incur any Indebtedness (including any Acquired Indebtedness)) or Disqualified Stock; provided that the Parent Guarantor, the Issuer and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) if, immediately after giving effect on a pro forma basis to the Incurrence of such Indebtedness and the Company shall notreceipt and application of the proceeds therefrom, and shall not permit any the Consolidated Leverage Ratio of its Restricted Subsidiaries to, issue any Disqualified Capital Stockthe Parent Guarantor is less than 3.50 to 1.0.
(bii) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company Parent Guarantor, the Issuer, any Subsidiary Guarantor and, solely to the extent expressly provided below, any Non-Guarantor Subsidiary, may Incur each and its Restricted Subsidiaries may incur any all of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence by the Company Notes (excluding any Additional Notes) and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereonNote Guarantees;
(2) Indebtedness of the Parent Guarantor, the Issuer, any Subsidiary Guarantor or any Non-Guarantor Subsidiary outstanding or in effect on the Original Issue DateDate excluding short-term indebtedness that would be eligible to be incurred pursuant to Section 4.1(a)(ii)(12);
(3) Indebtedness of the incurrence by Parent Guarantor, the Company Issuer, any Subsidiary Guarantor or any of its Non-Guarantor Subsidiary owed to the Parent Guarantor or any Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided that:
that (i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that event which results in any such Indebtedness being held by a Person other than the Company or Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company and (B) or any sale or other subsequent transfer of any such Indebtedness (other than to a Person that is neither the Company nor a Parent Guarantor or any Restricted Subsidiary of the Company Subsidiary) will be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3)) and (ii) if the Issuer, the Parent Guarantor or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Guarantor, such Indebtedness must expressly be subordinated in right of payment to the Notes and the Guarantee;
(4) Indebtedness (“Permitted Refinancing Indebtedness”) issued in exchange for, or the incurrence by the Company net proceeds of which are used to refinance or any of its Restricted Subsidiaries of Hedging Obligations refund, then outstanding Indebtedness Incurred under Hedging Contracts that are clause (i) or clauses (ii)(1) or (ii)(2) of this Section 4.1(a) and any refinancings thereof in an amount not to exceed the amount so refinanced or refunded (plus premiums, accrued interest, fees and expenses); provided that (i) Indebtedness the proceeds of which are used to refinance or refund the Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the Notes or the Note Guarantees shall only be permitted under this clause (4) if (x) in case the Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the Notes or the Note Guarantees, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is outstanding, is expressly made pari passu with, or subordinated in right of payment to, the remaining Notes or such Note Guarantees, or (y) in case the Indebtedness to be refinanced is subordinated in right of payment to the Notes or the Note Guarantees, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the Notes or such Note Guarantees at least to the extent that the Indebtedness to be refinanced is subordinated to the Notes or such Note Guarantees, (ii) such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not have a Stated Maturity prior to the Stated Maturity of the Indebtedness to be refinanced or refunded, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced or refunded, and (iii) in no event may Indebtedness of the Issuer or any Guarantor be refinanced pursuant to this clause (4) by means of any Indebtedness of any Restricted Subsidiary (other than the Issuer) that is not a Guarantor;
(5) Hedging Obligations arising under Commodity Hedging Agreements, Currency Agreements or Interest Rate Agreements which, when entered into, were entered into in the ordinary course of business for the purpose of protecting the Parent Guarantor, the Issuer or any Restricted Subsidiary from fluctuations in interest rates, currency exchange rates or the price of commodities and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of businessspeculation;
(6) inIndebtedness in respect of any obligations under workers’ compensation claims, severance payment obligations, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-kind insurance obligations, reclamation, statutory obligations, regulatory or other legal obligations, bankers’ acceptances, promissory notes, performance, surety or similar bonds, appeal or similar bonds, letters of credit or completion or performance guarantees and factoring and other financing of payables or receivables, or similar obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect arising from the honoring by a bank or other financial institution of bida check, performance draft or surety bonds issued for the account of the Company or any Restricted Subsidiary similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five (5) Business Days of its Incurrence;
(8) Indebtedness arising under agreements providing for indemnification, including guaranties and letters adjustment of credit supporting such bidpurchase price or similar obligations, performance or surety obligations (in each case other Incurred or assumed in connection with the acquisition or disposition of a business, assets or Capital Stock of a Restricted Subsidiary; provided that, in the case of a disposition, the maximum aggregate liability in respect of such Indebtedness will at no time exceed the gross proceeds actually received by the Parent Guarantor, the Issuer or such Restricted Subsidiary in connection with such disposition;
(9) Acquired Indebtedness; provided that immediately after giving effect on a pro forma basis to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be not greater than for an obligation for money borrowedthe Consolidated Leverage Ratio determined immediately before such Incurrence and the consummation of the related acquisition;
(10) Permitted Subsidiary Indebtedness;
(11) Guarantees of any Indebtedness permitted to be Incurred under this Section 4.1(a); and
(8) 12) other Indebtedness incurred Incurred by the Issuer, the Parent Guarantor or any Subsidiary Guarantor, in an aggregate principal amount, together with any other outstanding Indebtedness Incurred by the Issuer, the Parent Guarantor or any Subsidiary Guarantor since the Issue Date of the Notes, not to finance exceed the acquisitiongreater of (a) U.S.$65.0 million (or the Dollar Equivalent thereof) and (b) 10.0% of the Parent Guarantor’s Consolidated Net Tangible Assets at any time outstanding. For purposes of determining compliance with this Section 4.1(a), construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (cii)(1) For through (ii)(12) of this Section 4.1(a), including under the provision in clause (i) of this Section 4.1(a), the Parent Guarantor will be permitted to classify such item of Indebtedness on the date of its incurrence and may, in its sole discretion, divide and classify an item of Indebtedness in one or more of the types of Indebtedness and may later re-divide or reclassify all or a portion of such item of Indebtedness in any manner that complies with this Section 4.1(a) at such time. Notwithstanding any other provision of this Section 4.1(a), the maximum amount of Indebtedness that may be Incurred pursuant to this Section 4.1(a) shall not be deemed to be exceeded as a result solely of fluctuations in exchange rates or currency values after the date of Incurrence of such Indebtedness. It is further understood that for purposes of determining any particular amount of Indebtedness under clauses (i) and (ii) of this Section 4.1(a), Guarantees of (or obligations with respect to letters of credit supporting) Indebtedness otherwise included in the determination of such amount shall not also be included. Accrual of interest, accrual of dividends, payment of interest in the form of additional Indebtedness, payment of dividends in the form of shares of Preferred Stock, accretion or amortization of original issue discount will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary4.1(a).
Appears in 2 contracts
Sources: Indenture (Camposol Holding PLC), Indenture (Camposol Holding PLC)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall Loan Parties will not, and shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or in any manner otherwise become directly or indirectly liable for the payment of with respect to, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), any Indebtedness (including any Acquired Indebtedness), and the Company shall not, Loan Parties and shall not permit any of its their Restricted Subsidiaries to, will not issue any shares of Disqualified Capital Stock.
(b) Notwithstanding ; provided, however, that the prohibitions of Section 4.09(a), the Company Loan Parties and its their Restricted Subsidiaries may incur any Indebtedness and issue shares of the following items of Indebtedness Disqualified Stock if either (collectively, “Permitted Indebtedness”):
(1i) the incurrence by Total Net Leverage Ratio on a consolidated basis for the Company and most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the Subsidiary Guarantors of date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and no greater than 6.00 to 1.00 or (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and or Disqualified Stock is incurred or issued to finance a Subsidiary Guarantor is not Permitted Acquisition or similar Investment, no greater than the obligee, Total Net Leverage Ratio immediately prior to such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, incurrence or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
issuance or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (Aa) any subsequent issuance or transfer (b) of Equity Interests that results in any Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) if such Indebtedness being held by or Disqualified Stock is incurred or issued to finance a Person other than Permitted Acquisition or similar Investment, the Company Interest Coverage Ratio immediately prior to such incurrence or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemedissuance, in each case, to constitute an incurrence determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness by from the Company calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred, or such Restricted Subsidiarythe Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom, had occurred at the beginning of such Test Period, so long as, other than with respect to an aggregate principal amount of such Indebtedness at any time then outstanding not to exceed the greater of (x) $240,000,000 and (y) 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, such Indebtedness has a final maturity date no earlier than (other any customary bridge loan facility, so long as the long-term Indebtedness into which any such customary bridge facility is to be converted or exchanged satisfies the requirements of this provision and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges), and no scheduled amortization payments (other than 1.0% per annum or less) prior to, the date that was not permitted by this clause is ninety-one (3);
(491) days following the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts Revolver Facility Termination Date; provided, further, that are (i) Non-US Loan Parties and Restricted Subsidiaries that are not Loan Parties may not incur Indebtedness or issue shares of Disqualified Stock pursuant to this Section 9.2.1(a) in an aggregate principal amount at any time outstanding which is in excess of the ordinary course greater of business (x) $480,000,000 and not for speculative purposes and (y) 8.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred pursuant to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.9.2.1
Appears in 2 contracts
Sources: Abl Credit Agreement (WillScot Mobile Mini Holdings Corp.), Abl Credit Agreement (WillScot Mobile Mini Holdings Corp.)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock (except for the issuance by the Company of Disqualified Capital Stock (i) which is redeemable at the Company’s option in cash or Qualified Capital Stock and (ii) the dividends on which are payable at the Company’s option in cash or Qualified Capital Stock); provided that the Company and its Restricted Subsidiaries that are Subsidiary Guarantors may incur Indebtedness or issue shares of Disqualified Capital Stock if (1) at the time of such event and after giving effect thereto on a pro forma basis the Consolidated Fixed Charge Coverage Ratio for the four full quarters immediately preceding such event, taken as one period, would have been equal to or greater than 2.25 to 1.0 and (2) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is incurred or such Disqualified Capital Stock is issued or would occur as a consequence of the incurrence of the additional Indebtedness or the issuance of the Disqualified Capital Stock.
(b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence Revolving Credit Agreement in an aggregate principal amount not in excess of $50,000,000 at any one time outstanding and any guarantee thereof by the Company and the a Subsidiary Guarantors of Guarantor;
(x2) Indebtedness represented by under (a) the Series 1 New 2019 Convertible Notes issued on the Original Issue Date in the Exchange Offer and any Series 1 Consent Solicitation and the Additional New 2019 Convertible Notes issued in connection with the payment of interest thereon, thereon and (yb) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date in the Exchange Offer and any Series 2 Consent Solicitation and the Additional Notes issued in connection with the payment of interest thereon;
(23) Indebtedness outstanding or in effect on the Original Issue DateDate (and not exchanged in connection with the Exchange Offer and Consent Solicitation);
(34) obligations pursuant to Interest Rate Protection Obligations, but only to the extent such obligations do not exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Protection Obligations; obligations under currency exchange contracts entered into in the ordinary course of business; hedging arrangements entered into in the ordinary course of business for the purpose of protecting production, purchases and resales against fluctuations in oil or natural gas prices; and any guarantee of any of the foregoing;
(a) the subsidiary guarantees of the New 2019 Convertible Notes issued on the Issue Date in the Exchange and Consent Solicitation (and any assumption of the obligations guaranteed thereby) and the Additional New 2019 Convertible Notes issued in connection with the payment of interest thereon and (b) the Subsidiary Guarantees of the Notes issued on the Issue Date in the Exchange and Consent Solicitation (and any assumption of obligations guaranteed thereby) and the Additional Notes issued in connection with the payment of interest thereon;
(6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(iI) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Subsidiary Guarantee of such Subsidiary Guarantor; and
(iiII) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (36);
(47) the incurrence by the Company or Permitted Refinancing Indebtedness and any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessguarantee thereof;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business8) Non-Recourse Indebtedness;
(69) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(11) any additional Indebtedness in an aggregate principal amount not in excess of $75,000,000 at any one time outstanding and any guarantee thereof; provided that the Company may issue (and the Subsidiary Guarantors may guarantee) up to $91,875,000 of Additional New Senior Secured Notes under this clause (11) in lieu of paying cash interest of up to $75,000,000 on the New Senior Secured Notes, and any such issuance of Additional New Senior Secured Notes shall reduce (on a dollar for dollar basis) the amount of other Indebtedness that is permitted to be incurred under this clause (11); and
(8) 12) Indebtedness incurred under the New Senior Secured Notes issued on the Issue Date in an aggregate principal amount not to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding exceed $1.0 million in the aggregate700,000,000 and any guarantee thereof by a Subsidiary Guarantor.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of one or more of the categories of Permitted Indebtedness described in clauses (1) through (12) above or is entitled to be incurred pursuant to clause (a) of this Section 4.09, the Company may, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.09 and such item of Indebtedness will be treated as having been incurred pursuant to only one of such clauses of the definition of Permitted Indebtedness or the proviso of the foregoing sentence and an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness permitted hereunder; provided that all Indebtedness outstanding on the Issue Date under the Revolving Credit Agreement shall be deemed incurred under Section 4.09(b)(1) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified; provided, further, that all Indebtedness under the New Senior Secured Notes shall be deemed be incurred under Section 4.09(b)(12) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified; provided, further, that all Indebtedness under the New 2019 Convertible Notes (including the Additional New 2019 Convertible Notes) shall be deemed to be incurred under Section 4.02(b)(2)(a) and not under Section 4.09(a) or Section 4.09(b)(3) and may not be later reclassified.
(d) The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced (plus all accrued interest on the Indebtedness being refinanced and the amount of all expenses and premiums incurred in connection therewith).
(f) The amount of any guarantee by the Company or any Restricted Subsidiary of any Indebtedness of the Company or one or more Restricted Subsidiaries shall not be deemed to be outstanding or incurred for purposes of this Section 4.09 in addition to the amount of Indebtedness which it guarantees.
(g) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
(h) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Permitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 2 contracts
Sources: Indenture (Comstock Oil & Gas, LP), Indenture (Comstock Oil & Gas, LP)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall Loan Parties will not, and shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or in any manner otherwise become directly or indirectly liable for the payment of with respect to, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), any Indebtedness (including any Acquired Indebtedness), and the Company shall not, Loan Parties and shall not permit any of its their Restricted Subsidiaries to, will not issue any shares of Disqualified Capital Stock.
(b) Notwithstanding ; provided, however, that the prohibitions of Section 4.09(a), the Company Loan Parties and its their Restricted Subsidiaries may incur any Indebtedness and issue shares of the following items of Indebtedness Disqualified Stock if either (collectively, “Permitted Indebtedness”):
(1i) the incurrence by Total Net Leverage Ratio on a consolidated basis for the Company and most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the Subsidiary Guarantors of date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and no greater than 6.00 to 1.00 or (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and or Disqualified Stock is incurred or issued to finance a Subsidiary Guarantor is not Permitted Acquisition or similar Investment, no greater than the obligee, Total Net Leverage Ratio immediately prior to such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, incurrence or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
issuance or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (Aa) any subsequent issuance or transfer (b) of Equity Interests that results in any Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) if such Indebtedness being held by or Disqualified Stock is incurred or issued to finance a Person other than Permitted Acquisition or similar Investment, the Company Interest Coverage Ratio immediately prior to such incurrence or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemedissuance, in each case, to constitute an incurrence determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness by from the Company calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred, or such Restricted Subsidiarythe Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom, had occurred at the beginning of such Test Period, so long as, other than with respect to an aggregate principal amount of such Indebtedness at any time then outstanding not to exceed the greater of (x) $240,000,000 and (y) 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, such Indebtedness has a final maturity date no earlier than (other any customary bridge loan facility, so long as the long-term Indebtedness into which any such customary bridge facility is to be converted or exchanged satisfies the requirements of this provision and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges), and no scheduled amortization payments (other than 1.0% per annum or less) prior to, the date that was is ninety-one (91) days following the Revolver Facility Termination Date; provided, further, that (i) Canadian Loan Parties and Restricted Subsidiaries that are not permitted Loan Parties may not incur Indebtedness or issue shares of Disqualified Stock pursuant to this Section 9.2.1(a) in an aggregate principal amount at any time outstanding which is in excess of the greater of (x) $480,000,000 and (y) 8.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, (ii) such Indebtedness incurred pursuant to this Section 9.2.1(a) shall not be (A) secured Indebtedness unless (x) the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or issued would have been no greater than (i) 6.00 to 1.00 or (ii) if such Indebtedness is incurred or issued to finance a Permitted Acquisition or similar Investment, the Total Net Leverage Ratio immediately prior to such incurrence or issuance, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness from the calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such Test Period and (y) the Liens on the assets of any Loan Party securing such Indebtedness shall be on Collateral and shall be subordinated to the Liens securing the Secured Obligations pursuant to the terms of the Intercreditor Agreement (and the holders of such Indebtedness (or their duly appointed agent or other representative) shall have become party to the Intercreditor Agreement) or (B) guaranteed by any Person that is not a Loan Party unless such Indebtedness is incurred pursuant to clause (i) of the second proviso above and (iii) the Unit Subsidiary may not incur Indebtedness under this Section 9.2.1(a) other than Guarantee Obligations that are subordinated to the Secured Obligations in a manner at least as favorable to the Credit Parties as the subordination terms applicable to the Unit Subsidiary’s guaranty of the Senior Secured Notes on the Seventh Amendment Effective Date.
(b) The limitation set forth in clause (a) of this Section 9.2.1 will not prohibit any of the following:
(i) (A) Indebtedness arising under the Loan Documents, (B)(x) Indebtedness arising under the 2028 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto, provided that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(B)(x); provided, further, that in each case with respect to this clause (3B), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2028 Senior Secured Notes Indenture as in effect on the Seventh Amendment Effective Date, (C)(x) Indebtedness arising under the 2029 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto, provided that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(C)(x); provided, further, that in each case with respect to this clause (C), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2029 Senior Secured Notes Indenture as in effect on the Seventh Amendment Effective Date, (D)(x) Indebtedness arising under the 2030 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto, provided that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(D)(x); provided, further, that in each case with respect to this clause (D), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2030 Senior Secured Notes Indenture as in effect on the Seventh Amendment Effective Date and (E)(x) Indebtedness arising under the 2031 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto, provided that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(E)(x); provided, further, that in each case with respect to this clause (E), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2031 Senior Secured Notes Indenture as in effect on the Seventh Amendment Effective Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially Indebtedness or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management Disqualified Stock of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company Loan Party or any Restricted Subsidiary in respect of intercompany Investments permitted under Section 9.2.5;
(iii) Indebtedness of the ordinary course Loan Parties and the Restricted Subsidiaries (other than the Unit Subsidiary) in respect of businessany bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities entered into in the Ordinary Course of Business, including guaranties and letters of credit supporting such bidin respect of workers’ compensation claims, performance or surety bonds, 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, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, however, that upon the drawing of such letters of credit or the payment of such guarantees, such obligations are reimbursed within 30 days (in each case other than or such later date as provided for under the documents relating thereto, inclusive of any grace periods) following such drawing or incurrence and provided, further, that the outstanding amount of Indebtedness of the Loan Parties and the Restricted Subsidiaries under any such bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities shall not exceed an obligation for money borrowed); andaggregate principal amount at any one time outstanding equal to the greater of (x) $150,000,000 and (y) 2.5% of Consolidated Total Assets as of the last day of the most recently ended Test Period;
(8) iv) subject to compliance with Section 9.2.5 at the time of incurrence, Guarantee Obligations incurred by any Loan Parties or other Restricted Subsidiaries in respect of Indebtedness of any Loan Parties or other Restricted Subsidiaries otherwise permitted to be incurred hereunder or of other obligations of Loan Parties or other Restricted Subsidiaries that are not prohibited by the terms of this Agreement, provided, that (A) in the event any Indebtedness so guaranteed is subordinated, the Guarantee Obligations with respect thereto shall be subordinated to the same extent and (B) in the event of any guarantee by the Unit Subsidiary, such guarantee shall be subordinated to the Secured Obligations on a basis at least as favorable to the Secured Parties as the subordination terms applicable to the Unit Subsidiary’s guarantee of the Senior Secured Notes on the Seventh Amendment Effective Date;
(v) Guarantee Obligations incurred in the Ordinary Course of Business in respect of obligations of (or to) suppliers, customers, franchises, lessors and licensors;
(vi) (A) Indebtedness (including Capitalized Lease Obligations and Indebtedness arising under Capital Leases entered into in connection with Permitted Sale Leasebacks and Permitted Stand-Alone Capital Leases) and Disqualified Stock incurred by WS or any of the Restricted Subsidiaries to finance the acquisitionpurchase, lease, construction, installation or improvement of fixed property (real or capital personal), equipment or other assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Stock of any Person owning such assets; provided, that the aggregate principal amount of Indebtedness and Disqualified Stock incurred pursuant to this clause (vi) does not exceed an aggregate principal amount at any time outstanding equal to the greater of (x) $480,000,000 and (y) 8.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period; and (B) any Refinancing Indebtedness in respect of each of the foregoing; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (A);
(vii) (A) Indebtedness (including Capital Lease Obligationsany unused commitment) not exceeding outstanding on the Seventh Amendment Effective Date, provided, that, to the extent such Indebtedness is in excess of $1.0 million 75,000,000 in the aggregate., it is listed on Schedule 9.2.1 and (B) any Refinancing Indebtedness with respect to the foregoing; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (A);
(cviii) For purposes of this Section 4.09, Indebtedness of any the Loan Parties and the Restricted Subsidiaries (other than the Unit Subsidiary) in respect of Hedge Agreements (excluding Indebtedness in respect of Hedge Agreements entered into for speculative purposes);
(A) Indebtedness or Disqualified Stock of a Person that becomes a Restricted Subsidiary by merger, consolidation (or other acquisition shall be deemed to have been incurred by the Company and the is a Restricted Subsidiary that survives a merger or is the continuing entity following an amalgamation with such Person) after the Closing Date as the result of a Permitted Acquisition or similar Investment and that, if secured, is not secured by any Specified Assets (other than to the extent such Specified Assets may be subject to a Permitted Lien pursuant to clause (h) or (i) of the definition thereof), or Indebtedness secured only by assets that are acquired by a Restricted Subsidiary after the Closing Date as the result of a Permitted Acquisition or similar Investment that do not constitute Specified Assets (other than to the extent such Specified Assets may be subject to a Permitted Lien pursuant to clauses (h) or (i) of the definition thereof), provided, that (1) such Indebtedness or Disqualified Stock existed at the time such Person becomes became a Restricted Subsidiary.Subsidiary or at the time such assets subject to such Indebtedness were acquired and, in each case, was not created in anticipation thereof, (2) such Indebtedness is not guaranteed in any respect by any Loan Party or any Restricted Subsidiary (other than by any such Person that guaranteed such Indebtedness at the time such Person became a Restricted Subsidiary or at the time such assets subject to such Indebtedness were acquired or is the survivor of a merger or is the continuing entity following an amalgamation with such Person and any of its Subsidiaries or if such guarantees would be permitted by Section 9.2.5), (3) to the extent required under Section 9.1.12, such Person executes a supplement or joinder to this Agreement, substantially in the form of Exhibit H, in order to become a Loan Party and such other agreements, documents and actions required thereunder, (4) to the extent such Indebtedness or Disqualified Stock is at any time outstanding in an amount or liquidation preference in excess of the greater of $180,000,000 and 3.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, either (i) the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date of the consummation of the applicable Permitted Acquisition would be (x) no greater than 6.00 to 1.00 or (y) no greater than the Total Net Leverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) the Interest Coverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition, in each case, determined on a pro forma basis (including the assumption of such Indebtedness or Disqualified Stock), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such Test Period, (5) to the extent such Indebtedness or, Disqualified Stock is at any time outstanding in an amount or liquidation preference in excess of the greater of $150,000,000 and 2.75% of Consolidated Total Assets as of the last day of the most recently ended Test Period, if such Indebtedness is secured, the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date of the consummation of the applicable Permitted Acquisition would be (x) no greater than 6.00 to 1.00 or (y) no greater than the Total Net Leverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition, determined on a pro forma basis (including the assumption of such Indebtedness), as if the additional Indebtedness had been incurred
Appears in 1 contract
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, createCreate, incur, assume, guarantee assume or in any manner become directly or indirectly liable for the payment of suffer to exist (collectively, “incur”) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.
(b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence by the Company and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute "INCUR") any Indebtedness or issue Disqualified Stock, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary and (iii) to the extent permitted by Section 7.8(h), of any Subsidiary that is not a Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower or any of its Subsidiaries incurred to finance the acquisition, construction or improvement of fixed or capital assets, in an incurrence aggregate principal amount at any one time outstanding not to exceed $15,000,000, PROVIDED that such Indebtedness is incurred within 180 days after the date of such Indebtedness acquisition, construction or improvement and does not exceed the fair market value of such acquired, constructed or improved assets as determined in good faith by the Company Borrower's Board of Directors;
(d) Indebtedness represented by Capital Lease Obligations in respect of Sale/Leaseback Transactions involving the sale of restaurants within 24 months of the purchase of the associated real property, in an aggregate principal amount not to exceed $20,000,000 at any one time outstanding;
(e) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(e) and any refinancings, refundings, renewals or such Restricted Subsidiary, as extensions thereof (without any increase in the case may be, that was not permitted by this clause (3principal amount thereof);
(4f) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) guarantees made in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company Borrower or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising of any Subsidiary of the Borrower, PROVIDED that, in the case of any guarantee of obligations of any Subsidiary that is not a Guarantor, such guarantee is permitted by Section 7.8(h);
(g) guarantees made in the ordinary course of businessbusiness by the Borrower or any of its Subsidiaries of Indebtedness of franchisees of the Borrower or any Wholly Owned Subsidiary Guarantor in an aggregate principal amount at any one time outstanding not to exceed $20,000,000;
(6h) in-kind obligations relating Indebtedness incurred by the Borrower or any of its Subsidiaries to net oil or gas balancing positions arising finance the payment of property, casualty and specialty insurance premiums in the ordinary course of businessthe Borrower's business which is repaid within 18 months of its incurrence, PROVIDED that such Indebtedness does not exceed $7,500,000 in the aggregate at any one time outstanding;
(7i) Indebtedness represented by guarantees of loans to employees of the Borrower or any of its Subsidiaries for the purpose of paying withholding taxes incurred by such employees in connection with the vesting of stock and/or stock options granted by the Borrower, in an aggregate amount not to exceed $3,000,000 at any one time outstanding;
(i) Indebtedness of the Borrower in respect of bidthe Senior Notes in an aggregate principal amount not to exceed $175,000,000 and (ii) Guarantee Obligations of any Guarantor in respect of such Indebtedness;
(k) interest rate protection, performance currency swap, commodity swap and foreign exchange arrangements entered into in connection with bona fide hedging operations;
(l) initial or surety bonds issued for the account successive refinancings of the Company Indebtedness permitted by clause (j) above; PROVIDED that (i) such refinancing Indebtedness has a stated maturity no earlier than the stated maturity of the Indebtedness being refinanced, (ii) such refinancing Indebtedness has a weighted average life at the time such Indebtedness is incurred that is equal to or any Restricted greater than the weighted average life of the Indebtedness being refinanced, (iii) such refinancing Indebtedness is unsecured and (iv) such refinancing Indebtedness is in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced; and PROVIDED FURTHER that such refinancing Indebtedness shall not include Indebtedness of a Subsidiary in of the ordinary course Borrower that refinances Indebtedness of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed)the Borrower; and
(8) Indebtedness incurred m) obligations with respect to finance customary provisions regarding post-closing purchase price adjustments and indemnification in agreements for the acquisition, construction, purchase or improvement sale of fixed a business or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregateotherwise permitted by this Agreement.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Credit Agreement (Friendlys Restaurants Franchise Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall ------------------------------------------------- will not, and shall will not permit any of its Restricted Subsidiaries tosubsidiaries to (i) incur or permit to remain outstanding any indebtedness for money borrowed ("Indebtedness"), create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of except (collectively, “incur”A) any Senior Indebtedness (including any Acquired Indebtednessas defined in Section 13), (B) Indebtedness existing on the First Issuance Date, (C) Indebtedness permitted to be incurred by or under the Credit Agreement or the Canadian Credit Agreement, in each case as in effect from time to time after the First Issuance Date (other than Indebtedness that is subordinate or junior in right of payment (to any extent) to any Senior Indebtedness and senior or pan passu in right of payment (to any extent) to the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.
Notes (b) Notwithstanding the prohibitions of Section 4.09(a"Layered Indebtedness")), (D) in the Company and its Restricted Subsidiaries event that the Credit Agreement or the Canadian Credit Agreement has terminated, Indebtedness permitted to be incurred by or under any successor credit agreement with respect to Senior Indebtedness other than Layered Indebtedness, or if there exists no such credit agreement, such Indebtedness as may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence be mutually agreed upon by the Company and the Subsidiary Guarantors holders of a majority of the aggregate principal amount of the Notes then outstanding, (xE) Indebtedness represented incurred after the First Issuance Date for the sole purpose of financing all or a part of the cost of acquiring any interest in any business (whether by a purchase or assets, purchase of stock, merger or otherwise) other than Layered Indebtedness, (F) Indebtedness owing by the Series 1 Notes issued on Company or any subsidiary of the Original Issue Date and Company to any Series 1 Additional Notes issued in connection with subsidiary of the payment Company or to the Company, or (G)'Indebtedness incurred pursuant to the Purchase Agreement, or (ii) issue any capital stock ("Disqualified Stock") of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries subsidiaries (or her than the Preferred Stock (as hereinafter defined)) which by its terms (or by the terms of intercompany Indebtedness between any security into which it is convertible or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company for which it is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsexchangeable), or if upon the happening of any event, matures, or is mandatorily redeemable, whether pursuant to a Subsidiary Guarantor is sinking fund obligation or otherwise, or redeemable at the obligor option of the holder thereof, in whole or in part, on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligeeor prior to December 31, such Indebtedness must be expressly subordinated to the prior payment in full in cash 2009, other than a "put" or similar right by a holder of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results a minority interest in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary subsidiary of the Company and (B) any sale or other transfer approved by representatives to the Company's Board of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness Directors designated by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3);
(4) the incurrence by the Company WCAS VII or any of its Restricted Subsidiaries affiliates in connection with the acquisition of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence such subsidiary by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in (the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed"Put Securities"); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Securities Purchase Agreement (Select Medical Corp)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) the incurrence Guarantees by the Company or any Guarantor of its any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiaries of Hedging Obligations under Hedging Contracts Subsidiary that are represents:
(iA) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) intended with respect to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessIndebtedness permitted by this Indenture;
(5B) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising under currency exchange contracts entered into in the ordinary course of business;; and
(6C) in-kind obligations relating pursuant to net oil or gas balancing positions arising hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of businessbusiness for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of bidIndebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, performance as determined by the Company in good faith, of the acquired or surety bonds constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Guarantor in connection with (A) one or more standby letters of credit issued for the account of the Company or any Restricted Subsidiary a Guarantor in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); business and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, create, incur, issue, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”Incur,” “Incurrence,” “Incurred” and “Incurring” shall have meanings correlative to the foregoing) any Indebtedness (including any Acquired Indebtedness), and the Company shall not, will not issue any Disqualified Capital Stock and shall will not permit any of its Restricted Subsidiaries to, to issue any Disqualified Capital Stock or Preferred Stock; provided that the Company may Incur Indebtedness (including Acquired Indebtedness) or issue Disqualified Capital Stock, and any Restricted Subsidiary that is a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Capital Stock or Preferred Stock if (1) at the time of such event and after giving effect thereto on a pro forma basis the Consolidated Fixed Charge Coverage Ratio for the four full quarters immediately preceding such event, taken as one period, would have been equal to or greater than 2.25 to 1.0 and (2) no Default or Event of Default shall have occurred and be continuing at the time such additional Indebtedness is Incurred or such Disqualified Capital Stock or Preferred Stock is issued or would occur as a consequence of the Incurrence of the additional Indebtedness or the issuance of the Disqualified Capital Stock or Preferred Stock.
(b) Notwithstanding the prohibitions of The restrictions in Section 4.09(a), ) will not prohibit the Company and its Restricted Subsidiaries may incur Incurrence of any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence by the Company and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereonDate;
(2) Indebtedness outstanding or in effect on the Original Issue DateDate (and not repaid or defeased with the proceeds of the offering of the Notes);
(3) (I) obligations pursuant to Interest Rate Protection Obligations, but only to the incurrence extent such obligations do not exceed 105% of the aggregate principal amount of the Indebtedness covered by such Interest Rate Protection Obligations; (II) obligations under currency exchange contracts entered into in the ordinary course of business; and (III) hedging arrangements entered into in the ordinary course of business for the purpose of protecting production, purchases and resales against fluctuations in oil or natural gas prices, and any guarantee of any of the foregoing;
(4) the Subsidiary Guarantees (and any assumption of the obligations guaranteed thereby);
(5) the Incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(iI) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Notes, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsObligations with respect to the Subsidiary Guarantee of such Subsidiary Guarantor; and
(iiII) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (35);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge, in whole or in part, any Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (1) or (2) of this Section 4.09(b) or this clause (6);
(7) Non-Recourse Indebtedness;
(8) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(79) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed);
(10) Indebtedness under the Revolving Credit Agreement in an aggregate principal amount not in excess of $50,000,000 at any one time outstanding and any guarantee thereof by a Subsidiary Guarantor; and
(8) 11) any additional Indebtedness incurred to finance the acquisition, construction, or improvement in an aggregate principal amount not in excess of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate75,000,000 at any one time outstanding and any guarantee thereof.
(c) For purposes of determining compliance with this Section 4.09, in the event that an item of Indebtedness meets the criteria of one or more of the categories of Permitted Indebtedness described in clauses (1) through (11) described above or is entitled to be Incurred pursuant to clause (a) of this Section 4.09, the Company may, in its sole discretion, classify such item of Indebtedness in any Person manner that becomes a Restricted Subsidiary by merger, consolidation complies with this Section 4.09 and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses of the definition of Permitted Indebtedness or other acquisition the proviso of the foregoing sentence and an item of Indebtedness may be divided and classified in more than one of the types of Indebtedness permitted hereunder; provided that all Indebtedness outstanding on the Issue Date under the Revolving Credit Agreement shall be deemed Incurred under Section 4.09(b)(10) and not under Section 4.09(a) or Section 4.09(b)(2).
(d) The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Capital Stock or Preferred Stock will not be deemed to be an Incurrence of Indebtedness or an issuance of Disqualified Capital Stock or Preferred Stock for purposes of this covenant. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced (plus all accrued interest on the Indebtedness being refinanced and the amount of all expenses and premiums incurred by in connection therewith).
(f) Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company and the or any Restricted Subsidiary at may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the time exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Person becomes a Restricted SubsidiaryPermitted Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.
Appears in 1 contract
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall Loan Parties will not, and shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or in any manner otherwise become directly or indirectly liable for the payment of with respect to, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), any Indebtedness (including any Acquired Indebtedness), and the Company shall not, Loan Parties and shall not permit any of its their Restricted Subsidiaries to, will not issue any shares of Disqualified Capital Stock.
(b) Notwithstanding ; provided, however, that the prohibitions of Section 4.09(a), the Company Loan Parties and its their Restricted Subsidiaries may incur any Indebtedness and issue shares of the following items of Indebtedness Disqualified Stock if either (collectively, “Permitted Indebtedness”):
(1i) the incurrence by Total Net Leverage Ratio on a consolidated basis for the Company and most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the Subsidiary Guarantors of date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and no greater than 6.00 to 1.00 or (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and or Disqualified Stock is incurred or issued to finance a Subsidiary Guarantor is not Permitted Acquisition or similar Investment, no greater than the obligee, Total Net Leverage Ratio immediately prior to such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, incurrence or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
issuance or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (Aa) any subsequent issuance or transfer (b) of Equity Interests that results in any Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) if such Indebtedness being held by or Disqualified Stock is incurred or issued to finance a Person other than Permitted Acquisition or similar Investment, the Company Interest Coverage Ratio immediately prior to such incurrence or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemedissuance, in each case, to constitute an incurrence determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness by from the Company calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred, or such Restricted Subsidiarythe Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom, had occurred at the beginning of such Test Period, so long as, other than with respect to an aggregate principal amount of such Indebtedness at any time then outstanding not to exceed, when combined with the aggregate principal amount of Indebtedness incurred in reliance on the corresponding carveout contained in Section 9.2.1(b)(ix)(A)(6), the greater of (x) $200,000,000 and (y) 3.5% of Consolidated Total Assets as of the last day of the most recently ended Test Period, such Indebtedness has a final maturity date no earlier than (other any customary bridge loan facility, so long as the long-term Indebtedness into which any such customary bridge facility is to be converted or exchanged satisfies the requirements of this provision and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges), and no scheduled amortization payments (other than 1.0% per annum or less) prior to, the date that was is ninety-one (91) days following the Revolver Facility Termination Date; provided, further, that (i) Non-US Loan Parties and Restricted Subsidiaries that are not permitted Loan Parties may not incur Indebtedness or issue shares of Disqualified Stock pursuant to this Section 9.2.1(a) in an aggregate principal amount at any time outstanding which is in excess of the greater of (x) $400,000,000 and (y) 7.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, (ii) such Indebtedness incurred pursuant to this Section 9.2.1
(a) shall not be (A) secured Indebtedness unless (x) the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or issued would have been (x) no greater than 6.00 to 1.00 or (y) if such Indebtedness is incurred or issued to finance a Permitted Acquisition or similar Investment, no greater than the Total Net Leverage Ratio immediately prior to such incurrence or issuance, in each case, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness from the calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such Test Period and (y) the Liens on the assets of any Loan Party securing such Indebtedness shall be on Collateral and shall be subordinated to the Liens securing the Secured Obligations pursuant to the terms of the Intercreditor Agreement (and the holders of such Indebtedness (or their duly appointed agent or other representative) shall have become party to the Intercreditor Agreement) or (B) guaranteed by any Person that is not a Loan Party unless such Indebtedness is incurred pursuant to clause (i) of the second proviso above and (iii) the Unit Subsidiary may not incur Indebtedness under this Section 9.2.1(a) other than Guarantee Obligations that are subordinated to the Secured Obligations in a manner at least as favorable to the Credit Parties as the subordination terms applicable to the Unit Subsidiary’s guaranty of the 2023 Senior Secured Notes and the 2025 Senior Secured Notes on the Closing Date.
(b) The limitation set forth in clause (a) of this Section 9.2.1 will not prohibit any of the following:
(i) (A) Indebtedness arising under the Loan Documents, (B)(x) Indebtedness arising under the 2025 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(B)(x), so long as, in each case with respect to this clause (3B), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2025 Senior Secured Notes Indenture as in effect on the Closing Date and (C)(x) Indebtedness arising under the 2023 Senior Secured Notes and (y) any Refinancing Indebtedness with respect thereto; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (i)(C)(x), so long as, in each case with respect to this clause (C), the guarantee of the Unit Subsidiary thereof is subordinated on the terms as provided in the 2023 Senior Secured Notes Indenture as in effect on the Closing Date;
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially Indebtedness or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management Disqualified Stock of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company Loan Party or any Restricted Subsidiary in respect of intercompany Investments permitted under Section 9.2.5;
(iii) Indebtedness of the ordinary course Loan Parties and the Restricted Subsidiaries (other than the Unit Subsidiary) in respect of businessany bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities entered into in the Ordinary Course of Business, including guaranties and letters of credit supporting such bidin respect of workers’ compensation claims, performance or surety bonds, 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, performance or surety bonds, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance; provided, however, that upon the drawing of such letters of credit or the payment of such guarantees, such obligations are reimbursed within 30 days (in each case other than or such later date as provided for under the documents relating thereto, inclusive of any grace periods) following such drawing or incurrence and provided, further, that the outstanding amount of Indebtedness of the Loan Parties and the Restricted Subsidiaries under any such bankers’ acceptance, bank guarantees, letter of credit, warehouse receipt or similar facilities shall not exceed an obligation for money borrowed); andaggregate principal amount at any one time outstanding equal to the greater of (x) $100,000,000 and (y) 2.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period;
(8) iv) subject to compliance with Section 9.2.5 at the time of incurrence, Guarantee Obligations incurred by any Loan Parties or other Restricted Subsidiaries in respect of Indebtedness of any Loan Parties or other Restricted Subsidiaries otherwise permitted to be incurred hereunder or of other obligations of Loan Parties or other Restricted Subsidiaries that are not prohibited by the terms of this Agreement, provided, that (A) in the event any Indebtedness so guaranteed is subordinated, the Guarantee Obligations with respect thereto shall be subordinated to the same extent and (B) in the event of any guarantee by the Unit Subsidiary, such guarantee shall be subordinated to the Secured Obligations on a basis at least as favorable to the Secured Parties as the subordination terms applicable to the Unit Subsidiary’s guarantee of the 2023 Senior Secured Notes and the 2025 Senior Secured Notes on the Closing Date;
(v) Guarantee Obligations incurred in the Ordinary Course of Business in respect of obligations of (or to) suppliers, customers, franchises, lessors and licensors;
(vi) (A) Indebtedness (including Capitalized Lease Obligations and Indebtedness arising under Capital Leases entered into in connection with Permitted Sale Leasebacks and Permitted Stand-Alone Capital Leases) and Disqualified Stock incurred by WS International or any of the Restricted Subsidiaries to finance the acquisitionpurchase, lease, construction, installation or improvement of fixed property (real or capital personal), equipment or other assets that are used or useful in a Similar Business, whether through the direct purchase of assets or the Stock of any Person owning such assets; provided, that the aggregate principal amount of Indebtedness and Disqualified Stock incurred pursuant to this clause (vi) does not exceed an aggregate principal amount at any time outstanding equal to the greater of (x) $400,000,000 and (y) 7.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period; and (B) any Refinancing Indebtedness in respect of each of the foregoing; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (A);
(vii) (A) Indebtedness (including Capital Lease Obligationsany unused commitment) not exceeding outstanding on the Closing Date, provided, that, to the extent such Indebtedness is in excess of $1.0 million 50,000,000 in the aggregate., it is listed on Schedule 9.2.1 and (B) any Refinancing Indebtedness with respect to the foregoing; provided, that the incurrence of any such Refinancing Indebtedness shall not be deemed to have refreshed capacity under the foregoing clause (A);
(cviii) For purposes of this Section 4.09, Indebtedness of any the Loan Parties and the Restricted Subsidiaries (other than the Unit Subsidiary) in respect of Hedge Agreements (excluding Indebtedness in respect of Hedge Agreements entered into for speculative purposes);
(A) Indebtedness or Disqualified Stock of a Person that becomes a Restricted Subsidiary by merger, consolidation (or other acquisition shall be deemed to have been incurred by the Company and the is a Restricted Subsidiary that survives a merger or is the continuing entity following an amalgamation with such Person) after the Closing Date as the result of a Permitted Acquisition or similar Investment and that, if secured, is not secured by any Specified Assets (other than to the extent such Specified Assets may be subject to a Permitted Lien pursuant to clause (h) or (i) of the definition thereof), or Indebtedness secured only by assets that are acquired by a Restricted Subsidiary after the Closing Date as the result of a Permitted Acquisition or similar Investment that do not constitute Specified Assets (other than to the extent such Specified Assets may be subject to a Permitted Lien pursuant to clauses (h) or (i) of the definition thereof), provided, that (1) such Indebtedness or Disqualified Stock existed at the time such Person becomes became a Restricted Subsidiary.Subsidiary or at the time such assets subject to such Indebtedness were acquired and, in each case, was not created in anticipation thereof, (2) such Indebtedness is not guaranteed in any respect by any Loan Party or any Restricted Subsidiary (other than by any such Person that guaranteed such Indebtedness at the time such Person became a Restricted Subsidiary or at the time such assets subject to such Indebtedness were acquired or is the survivor of a merger or is the continuing entity following an amalgamation with such Person and any of its Subsidiaries or if such guarantees would be permitted by Section 9.2.5), (3) to the extent required under Section 9.1.12, such Person executes a supplement or joinder to this Agreement, substantially in the form of Exhibit H, in order to become a Loan Party and such other agreements, documents and actions required thereunder, (4) to the extent such Indebtedness or Disqualified Stock is at any time outstanding in an amount or liquidation preference in excess of the greater of $150,000,000 and 2.75% of Consolidated Total Assets as of the last day of the most recently ended Test Period, either (i) the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date of the consummation of the applicable Permitted Acquisition would be (x) no greater than 6.00 to 1.00 or (y) no greater than the Total Net Leverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) the Interest Coverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition, in each case, determined on a pro forma basis (including the assumption of such Indebtedness or Disqualified Stock), as if the additional Indebtedness had been incurred, or the Disqualified Stock had been issued, as the case may be, at the beginning of such Test Period, (5) to the extent such Indebtedness or, Disqualified Stock is at any time outstanding in an amount or liquidation preference in excess of the greater of $150,000,000 and 2.75% of Consolidated Total Assets as of the last day of the most recently ended Test Period, if such Indebtedness is secured, the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the date of the consummation of the applicable Permitted Acquisition would be (x) no greater than 6.00 to 1.00 or (y) no greater than the Total Net Leverage Ratio immediately prior to the consummation of the applicable Permitted Acquisition, determined on a pro forma basis (including the assumption of such Indebtedness), as if the additional Indebtedness had been incurred at the beginning of such Test Period and (6) other than with respect to an aggregate principal amount of such Indebtedness at any time then outstanding not to exceed, when combined with the aggregate principal amount of Indebtedness incurred in reliance on the corresponding carveout contained in the first proviso of Section 9.2.1(a), the greater of (x) $200,000,000 and (y) 3.5% of Consolidated Total Assets as of the last day of the most recently ended Test Period, such Indebtedness has a final maturity date no earlier than (other any customary bridge loan facility, so long as the long-term Indebtedness into which any such customary bridge facility is to be converted or exchanged satisfies the requirements of this provision and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges), and no scheduled amortization payments (other than 1.0% per annum
Appears in 1 contract
Sources: Abl Credit Agreement (WillScot Mobile Mini Holdings Corp.)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall ------------------------------------------------- will not, and shall will not permit any of its Restricted Subsidiaries subsidiaries to, create(i) incur or permit to remain outstanding any indebtedness for money borrowed ("Indebtedness"), incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of except (collectively, “incur”A) any Senior Indebtedness (including any Acquired Indebtednessas defined in Section 13), (B) Indebtedness existing on the First Issuance Date, (C) Indebtedness permitted to be incurred by or under the Credit Agreement or the Canadian Credit Agreement, in each case as in effect from time to time after the First Issuance Date (other than Indebtedness that is subordinate or junior in right of payment (to any extent) to any Senior Indebtedness and senior or pari passu in right of payment (to any extent) to the Company shall not, and shall not permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.
Notes (b) Notwithstanding the prohibitions of Section 4.09(a"Layered Indebtedness")), (D) in the Company and its Restricted Subsidiaries event that the Credit Agreement or the Canadian Credit Agreement has terminated, Indebtedness permitted to be incurred by or under any successor credit agreement with respect to Senior Indebtedness other than Layered Indebtedness, or if there exists no such credit agreement, such Indebtedness as may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence be mutually agreed upon by the Company and the Subsidiary Guarantors holders of a majority of the aggregate principal amount of the Notes then outstanding, (xB) Indebtedness represented incurred after the First Issuance Date for the sole purpose of financing all or a part of the cost of acquiring any interest in any business (whether by a purchase 4 or assets, purchase of stock, merger or otherwise) other than Layered Indebtedness, (F) Indebtedness owing by the Series 1 Notes issued on Company or any subsidiary of the Original Issue Date and Company to any Series 1 Additional Notes issued in connection with subsidiary of the payment of interest thereonCompany or to the Company, and or (yG) Indebtedness represented by incurred pursuant to the Series 2 Notes issued on the Series 2 Issue Date and Purchase Agreement, or (ii) issue any Series 2 Additional Notes issued in connection with the payment capital stock ("Disqualified Stock") of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
subsidiaries (i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company Preferred Stock (as hereinafter defined)) which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures, or is mandatorily redeemable, whether pursuant to a Restricted Subsidiary sinking fund obligation or otherwise, or redeemable at the option of the holder thereof in whole or in part, on or prior to December 31, 2009, other than a "put" or similar right by a holder of a minority interest in any subsidiary of the Company and (B) any sale or other transfer approved by representatives to the Company's Board of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness Directors designated by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3);
(4) the incurrence by the Company WCAS VII or any of its Restricted Subsidiaries affiliates in connection with the acquisition of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence such subsidiary by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in (the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed"Put Securities"); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Securities Purchase Agreement (Select Medical Corp)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) the incurrence Guarantees by the Company or any Guarantor of its any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiaries of Hedging Obligations under Hedging Contracts Subsidiary that are represents:
(iA) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) intended with respect to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessIndebtedness permitted by this Indenture;
(5B) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(67) in-kind Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Guarantor in connection with
(A) one or more standby letters of credit issued for the account of the Company or a Guarantor in the ordinary course of business and
(B) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; provided, further, that with respect to clauses (A) and (B), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) Indebtedness of Company or any Restricted Subsidiary with respect to obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bidthe Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, performance earn-outs or other similar obligations or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary;
(11) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued for in exchange for, or the account net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to Section 4.06(a) and clause (2), (3), (7), (11) or (12) of this Section 4.06 (b);
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting either one of the financial tests set forth in Section 5.01(a)(3);
(13) Indebtedness of the Company or any Restricted Subsidiary with respect to any obligation 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, provided, however, that such Indebtedness is extinguished within five business days of incurrence; and
(14) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (13) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the ordinary course aggregate principal amount of business, including guaranties and letters of credit supporting all such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) shall not exceeding exceed $1.0 million 40,000,000 outstanding at any one time in the aggregate.
(c) For purposes of determining compliance with this Section 4.09Section, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section, the Company in its sole discretion may classify or reclassify such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition Indebtedness under the Senior Credit Facility which was in existence on the Prior Issue Date (after giving effect to the application of the net proceeds from the Prior Notes) shall be deemed to have been incurred pursuant to clause (1) of subsection (b) above rather than subsection (a) above.
(d) Indebtedness permitted by the Company this Section need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness.
(e) Accrual of interest, accretion of principal or liquidation preference (or similar amount) in respect of Preferred Stock or amortization of original issue discount, and the Restricted Subsidiary payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this covenant; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the time such Person becomes a Restricted Subsidiaryamount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (ai) The Company shall Parent Guarantor will not, and shall will not permit any of its Restricted Subsidiaries to, create, incur, assume, guarantee or in any manner become directly or indirectly liable for the payment of (collectively, “incur”) Incur any Indebtedness (including any Acquired Indebtedness)) or Disqualified Stock; provided that the Parent Guarantor, the Issuer and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) if, immediately after giving effect on a pro forma basis to the Incurrence of such Indebtedness and the Company shall notreceipt and application of the proceeds therefrom, and shall not permit any the Consolidated Leverage Ratio of its Restricted Subsidiaries to, issue any Disqualified Capital Stockthe Parent Guarantor is less than 3.25 to 1.0.
(bii) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company Parent Guarantor, the Issuer, any Subsidiary Guarantor and, to the extent provided below, any Non-Guarantor Subsidiary, may Incur each and its Restricted Subsidiaries may incur any all of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) Indebtedness under the incurrence by the Company New Notes (excluding any Additional New Notes) and the Subsidiary Guarantors of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereonNote Guarantees;
(2) Indebtedness of the Parent Guarantor, the Issuer, any Subsidiary Guarantor or any Non-Guarantor Subsidiary outstanding or in effect on the Original Issue DateDate excluding short-term indebtedness that would be eligible to be incurred pursuant to Section 4.1(a)(12);
(3) Indebtedness of the incurrence by Parent Guarantor, the Company Issuer, any Subsidiary Guarantor or any of its Non-Guarantor Subsidiary owed to the Parent Guarantor or any Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted SubsidiariesSubsidiary; provided that:
that (i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that event which results in any such Indebtedness being held by a Person other than the Company or Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Company and (B) or any sale or other subsequent transfer of any such Indebtedness (other than to a Person that is neither the Company nor a Parent Guarantor or any Restricted Subsidiary of the Company Subsidiary) will be deemed, in each case, to constitute an incurrence Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3)) and (ii) if the Issuer, the Parent Guarantor or any Subsidiary Guarantor is the obligor on such Indebtedness and the obligee is not the Issuer or a Guarantor, such Indebtedness must expressly be subordinated in right of payment to the New Notes and the Guarantee;
(4) Indebtedness (“Permitted Refinancing Indebtedness”) issued in exchange for, or the incurrence by the Company net proceeds of which are used to refinance or any of its Restricted Subsidiaries of Hedging Obligations refund, then outstanding Indebtedness Incurred under Hedging Contracts that are clause (i) or clauses (ii)(1) or (ii)(2) of this Section 4.1(a) and any refinancings thereof in an amount not to exceed the amount so refinanced or refunded (plus premiums, accrued interest, fees and expenses); provided that (i) Indebtedness the proceeds of which are used to refinance or refund the New Notes or Indebtedness that is pari passu with, or subordinated in right of payment to, the New Notes or the Guarantees shall only be permitted under this clause (4) if (x) in case the New Notes are refinanced in part or the Indebtedness to be refinanced is pari passu with the New Notes or the Guarantees, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is outstanding, is expressly made pari passu with, or subordinated in right of payment to, the remaining Notes or such Guarantees, or (y) in case the Indebtedness to be refinanced is subordinated in right of payment to the New Notes or the Guarantees, such new Indebtedness, by its terms or by the terms of any agreement or instrument pursuant to which such new Indebtedness is issued or remains outstanding, is expressly made subordinate in right of payment to the New Notes or such Guarantees at least to the extent that the Indebtedness to be refinanced is subordinated to the New Notes or such Guarantees, (ii) such new Indebtedness, determined as of the date of Incurrence of such new Indebtedness, does not have a Stated Maturity prior to the Stated Maturity of the Indebtedness to be refinanced or refunded, and the Average Life of such new Indebtedness is at least equal to the remaining Average Life of the Indebtedness to be refinanced or refunded and (iii) in no event may Indebtedness of the Issuer or any Guarantor be refinanced pursuant to this clause by means of any Indebtedness of any Restricted Subsidiary (other than the Issuer) that is not a Guarantor;
(5) Hedging Obligations arising under Commodity Hedging Agreements, Currency Agreements or Interest Rate Agreements which, when entered into, were entered into in the ordinary course of business for the purpose of protecting the Parent Guarantor, the Issuer or any Restricted Subsidiary from fluctuations in interest rates, currency exchange rates or the price of commodities and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of businessspeculation;
(6) inIndebtedness in respect of any obligations under workers’ compensation claims, severance payment obligations, payment obligations in connection with health or other types of social security benefits, unemployment or other insurance or self-kind insurance obligations, reclamation, statutory obligations, regulatory or other legal obligations, bankers’ acceptances, promissory notes, performance, surety or similar bonds, appeal or similar bonds, letters of credit or completion or performance guarantees and factoring and other financing of payables or receivables, or similar obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect arising from the honoring by a bank or other financial institution of bida check, performance draft or surety bonds issued for the account of the Company or any Restricted Subsidiary similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five (5) Business Days of its Incurrence;
(8) Indebtedness arising under agreements providing for indemnification, including guaranties and letters adjustment of credit supporting such bidpurchase price or similar obligations, performance or surety obligations (in each case other Incurred or assumed in connection with the acquisition or disposition of a business, assets or Capital Stock of a Restricted Subsidiary; provided that, in the case of a disposition, the maximum aggregate liability in respect of such Indebtedness will at no time exceed the gross proceeds actually received by the Parent Guarantor, the Issuer or such Restricted Subsidiary in connection with such disposition;
(9) Acquired Indebtedness; provided that immediately after giving effect on a pro forma basis to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be not greater than the Consolidated Leverage Ratio determined immediately before such Incurrence and the consummation of the related acquisition;
(10) Permitted Subsidiary Indebtedness;
(11) Guarantees of any Indebtedness permitted to be Incurred under this Section 4.1(a);
(12) Indebtedness Incurred for inventory or receivables financing in the ordinary course of business with a Stated Maturity not exceeding one year from the date of the Incurrence in an obligation aggregate principal amount outstanding not to exceed 25.0% of the consolidated net sales of the Parent Guarantor and its Restricted Subsidiaries, calculated in accordance with IFRS, for money borrowed)the twelve-month period ended on the last day of the most recent fiscal quarter ending prior to the date of such Incurrence; and
(8) 13) Other Indebtedness incurred Incurred by the Issuer, the Parent Guarantor or any of its Restricted Subsidiaries, in an aggregate principal amount, together with any other outstanding Indebtedness Incurred by the Issuer, the Parent Guarantor or any of its Restricted Subsidiaries since the date the Existing Notes were issued, not to finance exceed the acquisitiongreater of (a) U.S.$30 million (or the Dollar Equivalent thereof) and (b) 5.0% of the total assets of the Parent Guarantor and its Restricted Subsidiaries, constructioncalculated in accordance with IFRS as of the end of the most recent fiscal quarter ending prior to the date of such Incurrence. For purposes of determining compliance with Section 4.1(a), or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in clauses (cii)(1) For through (13) of this Section 4.1(a), including under the proviso in clause (i) of this Section 4.1(a), the Parent Guarantor will be permitted to classify such item of Indebtedness on the date of its incurrence and may, in its sole discretion, divide and classify an item of Indebtedness in one or more of the types of Indebtedness and may later re-divide or reclassify all or a portion of such item of Indebtedness in any manner that complies with this covenant at such time. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that may be Incurred pursuant to this covenant shall not be deemed to be exceeded as a result solely of fluctuations in exchange rates or currency values after the date of Incurrence of such Indebtedness. It is further understood that for purposes of determining any particular amount of Indebtedness under clauses (i) and (ii) of this Section 4.1(a), guarantees of (or obligations with respect to letters of credit supporting) Indebtedness otherwise included in the determination of such amount shall not also be included. Accrual of interest, accrual of dividends, payment of interest in the form of additional Indebtedness, payment of dividends in the form of shares of Preferred Stock, accretion or amortization of original issue discount will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary4.1(a).
Appears in 1 contract
Sources: Indenture (Camposol Holding PLC)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall Loan Parties will not, and shall not permit any of its their Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or in any manner otherwise become directly or indirectly liable for the payment of with respect to, contingently or otherwise (collectively, “incur” and collectively, an “incurrence”) ), any Indebtedness (including any Acquired Indebtedness), and the Company shall not, Loan Parties and shall not permit any of its their Restricted Subsidiaries to, will not issue any shares of Disqualified Capital Stock.
(b) Notwithstanding ; provided, however, that the prohibitions of Section 4.09(a), the Company Loan Parties and its their Restricted Subsidiaries may incur any Indebtedness and issue shares of the following items of Indebtedness Disqualified Stock if either (collectively, “Permitted Indebtedness”):
(1i) the incurrence by Total Net Leverage Ratio on a consolidated basis for the Company and most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (a) or (b) of Section 9.1.1 on or immediately preceding the Subsidiary Guarantors of date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would have been (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, and no greater than 6.00 to 1.00 or (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment of interest thereon;
(2) Indebtedness outstanding or in effect on the Original Issue Date;
(3) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and or Disqualified Stock is incurred or issued to finance a Subsidiary Guarantor is not Permitted Acquisition or similar Investment, no greater than the obligee, Total Net Leverage Ratio immediately prior to such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, incurrence or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
issuance or (ii) the Interest Coverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to clause (Aa) any subsequent issuance or transfer (b) of Equity Interests that results in any Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued is not less than (x) 2.0 to 1.0 or (y) if such Indebtedness being held by or Disqualified Stock is incurred or issued to finance a Person other than Permitted Acquisition or similar Investment, the Company Interest Coverage Ratio immediately prior to such incurrence or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemedissuance, in each case, to constitute an incurrence determined on a pro forma basis (including a pro forma application of the net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness by from the Company calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred, or such Restricted Subsidiarythe Disqualified Stock had been issued, as the case may be, and the application of proceeds therefrom, had occurred at the beginning of such Test Period, so long as, other than with respect to an aggregate principal amount of such Indebtedness at any time then outstanding not to exceed the greater of (x) $240,000,000 and (y) 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, such Indebtedness has a final maturity date no earlier than (other any customary bridge loan facility, so long as the long-term Indebtedness into which any such customary bridge facility is to be converted or exchanged satisfies the requirements of this provision and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges), and no scheduled amortization payments (other than 1.0% per annum or less) prior to, the date that was not permitted by this clause is ninety-one (3);
(491) days following the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts Revolver Facility Termination Date; provided, further, that are (i) Non-US Loan Parties and Restricted Subsidiaries that are not Loan Parties may not incur Indebtedness or issue shares of Disqualified Stock pursuant to this Section 9.2.1(a) in an aggregate principal amount at any time outstanding which is in excess of the ordinary course greater of business (x) $480,000,000 and not for speculative purposes and (y) 8.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period, (ii) intended such Indebtedness incurred pursuant to this Section 9.2.1(a) shall not be (A) secured Indebtedness unless (x) the Total Net Leverage Ratio on a consolidated basis for the most recently ended Test Period for which financial statements have been or are required to be commercially delivered pursuant to clause (a) or economically appropriate (b) of Section 9.1.1 on or immediately preceding the date on which such additional Indebtedness is incurred or issued would have been no greater than (i) 6.00 to mitigate 1.00 or manage risks(ii) if such Indebtedness is incurred or issued to finance a Permitted Acquisition or similar Investment, respond the Total Net Leverage Ratio immediately prior to commodity market conditions and/or implement optimization strategies such incurrence or issuance, in the conduct and management each case, determined on a pro forma basis (including a pro forma application of the Company’s net proceeds therefrom, but without otherwise netting the cash proceeds of any such Indebtedness from the calculation of Consolidated Total Debt), as if the additional Indebtedness had been incurred and its Restricted Subsidiaries’ business;
the application of proceeds therefrom had occurred at the beginning of such Test Period and (5y) the incurrence by Liens on the Company or assets of any of its Restricted Subsidiaries of obligations relating Loan Party securing such Indebtedness shall be on Collateral and shall be subordinated to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating Liens securing the Secured Obligations pursuant to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds issued for the account terms of the Company Intercreditor Agreement (and the holders of such Indebtedness (or any Restricted Subsidiary in their duly appointed agent or other representative) shall have become party to the ordinary course of business, including guaranties and letters of credit supporting such bid, performance Intercreditor Agreement) or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease ObligationsB) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of guaranteed by any Person that becomes is not a Restricted Loan Party unless such Indebtedness is incurred pursuant to clause (i) of the second proviso above and (iii) the Unit Subsidiary by mergermay not incur Indebtedness under this Section 9.2.1(a) other than Guarantee Obligations that are subordinated to the Secured Obligations in a manner at least as favorable to the Credit Parties as the subordination terms applicable to the Unit Subsidiary’s guaranty of the 2032 Senior Secured Bridge Facility on the Sixth Amendment Effective Date, consolidation or other acquisition shall be deemed to have been incurred by the Company 2032 Senior Secured Notes on the Sixth Amendment Effective Date, the 2031 Senior Secured Notes on the Sixth Amendment Effective Date, the 2029 Senior Secured Bridge Facility on the Sixth Amendment Effective Date, the 2029 Senior Secured Notes on the Sixth Amendment Effective Date, the 2028 Senior Secured Notes on the Fourth Amendment Effective Date and the Restricted Subsidiary at 2025 Senior Secured Notes on the time such Person becomes a Restricted SubsidiaryClosing Date.
Appears in 1 contract
Sources: Abl Credit Agreement (WillScot Mobile Mini Holdings Corp.)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness of (i) the Company pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) Indebtedness of the Company or any Guarantor outstanding or in effect on the Original Issue Date, and not otherwise referred to in this definition of “Permitted Debt”;
(34) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) Guarantees by the incurrence Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that represents:
(A) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;
(B) obligations under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries Subsidiaries, whether through the direct purchase of Hedging Obligations such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under Hedging Contracts that are this clause (i7) did not in each case at the ordinary course time of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risksincurrence exceed the Fair Market Value, respond to commodity market conditions and/or implement optimization strategies as determined by the Company in the conduct and management good faith, of the Company’s and its Restricted Subsidiaries’ businessacquired or constructed asset or improvement so financed;
(5) the incurrence by 8) Indebtedness of the Company or any Guarantor in connection with (A) one or more standby letters of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds credit issued for the account of the Company or any Restricted Subsidiary a Guarantor in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); business and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall not, will not and shall will not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) contract, create, incur, assume, guarantee assume or in any manner become directly suffer or indirectly liable for the payment of (collectively, “incur”) permit to exist any Indebtedness (including by way of transferring to any Acquired Indebtedness), and third party any Indebtedness of the Company shall not, and shall not permit or any Subsidiary of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.
(b) Notwithstanding the prohibitions of Section 4.09(a), the Company and its Restricted Subsidiaries may incur any of the following items of Indebtedness (collectively, “Permitted Indebtedness”):
(1) the incurrence presently held by the Company and or any Subsidiary of the Subsidiary Guarantors of Company), except:
(xA) Indebtedness represented by the Notes;
(B) Indebtedness under Sections 1.4 of the ▇▇▇▇▇▇ Acquisition Agreement;
(C) up to $28,000,000 of Indebtedness of the Company and its Subsidiaries under the line of credit letter agreement, dated March 8, 2000, between the Company and Commerce Bank N.A., as amended, modified, supplemented, amended and restated, extended, renewed, refinanced and/or replaced in an aggregate principal amount not exceeding such amount ("Senior Credit Agreement Indebtedness");
(D) Indebtedness in respect of the City of Lenexa, Kansas Taxable Industrial Revenue Bonds (LabOne, Inc. Project) Series 1 Notes issued 1998A outstanding on the Original Issue Date date hereof (the "Industrial Revenue Bonds") under the (x) Reimbursement Agreement, dated as of September 1, 1998, between the Company and any Series 1 Additional Notes issued in connection with the payment of interest thereonCommerce Bank N.A., as amended, modified, supplemented, amended and restated, refinanced and/or replaced, and (y) Indebtedness represented the Lease, dated as of September 1, 1998, between the Company and the City of Lenexa, Kansas, in an aggregate amount not to exceed $16,300,000, as reduced by the Series 2 Notes issued amount of all payments of principal on the Series 2 Issue Date Industrial Revenue Bonds made after the date hereof ("IRB Indebtedness" and, together with the Senior Credit Agreement Indebtedness, "Senior Indebtedness");
(E) other Indebtedness of the Company and any Series 2 Additional Notes issued its Subsidiaries existing on the date hereof and set forth in Item 6.09(a)(i)(E) of the Disclosure Schedule ("Existing Indebtedness") and Indebtedness incurred in connection with any subsequent extension, renewal or refinancing thereof; provided, that (x) the payment amount thereof is not increased and (y) the terms thereof are no less favorable to the holders of interest thereonthe Series B-2 Preferred Shares, the Series C-2 Preferred Shares and the Notes than the terms of the agreement or instrument being extended, renewed or refinanced;
(2F) Indebtedness outstanding owing by the Company or in effect on any Subsidiary of the Original Issue DateCompany to any wholly-owned Subsidiary of the Company or to the Company;
(3G) Capitalized Lease Obligations (as hereinafter defined) of the incurrence by Company and its Subsidiaries in an amount not to exceed $1,000,000 in the aggregate;
(H) Indebtedness related solely to interest rate protection or currency hedging obligations entered into to protect the Company and its Subsidiaries from fluctuations in interest or currency exchange rates and not for speculative purposes;
(I) Indebtedness of the Company or any of its Restricted Subsidiaries in connection with standby letters of intercompany Indebtedness between credit or among the Company and any of its Restricted Subsidiaries; provided that:
(i) if the Company is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeperformance, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations, surety or if a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligations; and
(ii) (A) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company and (B) any sale or other transfer of any such Indebtedness to a Person that is neither the Company nor a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (3);
(4) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations under Hedging Contracts that are (i) in the ordinary course of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ business;
(5) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising appeal bonds issued in the ordinary course of business;
(6J) in-kind Indebtedness of any Person acquired by the Company or any Subsidiary, existing at the time of acquisition and not incurred in contemplation thereof; 42
(K) Indebtedness that is incurred and used to repurchase all of the outstanding Series A Notes and Series B Notes or to redeem all of the outstanding Series B-2 Preferred Shares and Series C-2 Preferred Shares pursuant to obligations relating of the Company to net oil effect such repurchases or gas balancing positions arising in redemptions; provided, that any such Indebtedness that is used to redeem the ordinary course Series B-2 Preferred Shares and Series C-2 Preferred Shares shall (x) be subordinated to all Notes then outstanding, if any, and (y) not require repayment of businessprincipal prior to the scheduled repayment at maturity of any Notes then outstanding;
(7L) other Indebtedness in respect of bidthe Company and its Subsidiaries so long as the aggregate amount of all Indebtedness of the Company and its Subsidiaries, performance or surety bonds issued after giving effect to the incurrence thereof, does not exceed three times the consolidated net income of the Company before interest, income taxes, depreciation and amortization for the account twelve months ending as of the date of such incurrence, adjusted for synergies from pending or completed acquisitions on such date in such amount, if any, as may be agreed upon by the Company and the Purchaser Representative which agreement will not be unreasonably withheld or delayed ("Additional Indebtedness"); and
(M) guarantees of Indebtedness otherwise permitted hereunder; or
(ii) issue any capital stock of the Company or any Restricted Subsidiary in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations its Subsidiaries (in each case other than Series C-1 Preferred Shares and/or Series C-2 Preferred Shares) which by its terms (or by the terms of any security into which it is convertible or for an obligation for money borrowedwhich it is exchangeable); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in upon the aggregate.
(c) For purposes of this Section 4.09, Indebtedness happening of any Person that becomes event, matures, or is mandatorily redeemable, whether pursuant to a Restricted Subsidiary by mergersinking fund obligation or otherwise, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary redeemable at the time such Person becomes a Restricted Subsidiaryoption of the holder thereof, in whole or in part prior to the later of Company Shareholder Approval and December 31, 2008 ("Disqualified Stock").
Appears in 1 contract
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) Guarantees by the incurrence Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that represents:
(A) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;
(B) obligations under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries Subsidiaries, whether through the direct purchase of Hedging Obligations such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under Hedging Contracts that are this clause (i7) did not in each case at the ordinary course time of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risksincurrence exceed the Fair Market Value, respond to commodity market conditions and/or implement optimization strategies as determined by the Company in the conduct and management good faith, of the Company’s and its Restricted Subsidiaries’ businessacquired or constructed asset or improvement so financed;
(5) the incurrence by 8) Indebtedness of the Company or any Guarantor in connection with:
(A) one or more standby letters of its Restricted Subsidiaries credit issued for the account of obligations relating to net Hydrocarbon balancing positions arising the Company or a Guarantor in the ordinary course of business; and
(B) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; provided, further, that with respect to clauses (A) and (B), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(69) in-kind Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bidthe Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, performance earn-outs or other similar obligations or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary;
(11) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued for in exchange for, or the account net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to Section 4.06(a) and clause (2), (3), (7), (11) or (12) of this Section 4.06(b);
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting any one of the three alternative financial tests set forth in Section 5.01(a)(3);
(13) Indebtedness of the Company or any Restricted Subsidiary with respect to any obligation 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, provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(14) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries; and
(15) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (14) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the ordinary course aggregate principal amount of business, including guaranties all such Indebtedness shall not exceed the greater of (x) $50,000,000 and letters (y) 2.5% of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million Adjusted Consolidated Net Tangible Assets outstanding at any one time in the aggregate.
(c) For purposes of determining compliance with this Section 4.09Section, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section, the Company in its sole discretion may classify or reclassify such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition Indebtedness under the Senior Credit Facility which was in existence on the Prior Issue Date (after giving effect to the application of the net proceeds from the Prior Notes) shall be deemed to have been incurred pursuant to clause (1) of subsection (b) above rather than subsection (a) above.
(d) Indebtedness permitted by the Company this Section need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness.
(e) Accrual of interest, accretion of principal or liquidation preference (or similar amount) in respect of Preferred Stock or amortization of original issue discount, and the Restricted Subsidiary payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the time such Person becomes a Restricted Subsidiaryamount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guaranty of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guaranty, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) the incurrence Guarantees by the Company or any Guarantor of its any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiaries of Hedging Obligations under Hedging Contracts Subsidiary that are represents:
(iA) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) intended with respect to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessIndebtedness permitted by this Indenture;
(5B) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising under currency exchange contracts entered into in the ordinary course of business;; and
(6C) in-kind obligations relating pursuant to net oil or gas balancing positions arising hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of businessbusiness for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of bidIndebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, performance as determined by the Company in good faith, of the acquired or surety bonds constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Guarantor in connection with (A) one or more standby letters of credit issued for the account of the Company or any Restricted Subsidiary a Guarantor in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); business and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness of (i) the Company pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) Indebtedness of the Company or any Guarantor outstanding or in effect on the Original Issue Date, and not otherwise referred to in this definition of “Permitted Debt”;
(34) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) Guarantees by the incurrence Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that represents:
(A) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;
(B) obligations under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries Subsidiaries, whether through the direct purchase of Hedging Obligations such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under Hedging Contracts that are this clause (i7) did not in each case at the ordinary course time of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risksincurrence exceed the Fair Market Value, respond to commodity market conditions and/or implement optimization strategies as determined by the Company in the conduct and management good faith, of the Company’s and its Restricted Subsidiaries’ businessacquired or constructed asset or improvement so financed;
(5) the incurrence by 8) Indebtedness of the Company or any Guarantor in connection with:
(A) one or more standby letters of its Restricted Subsidiaries credit issued for the account of obligations relating to net Hydrocarbon balancing positions arising the Company or a Guarantor in the ordinary course of business; and
(B) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; provided, further, that with respect to clauses (A) and (B), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(69) in-kind Indebtedness of the Company or any Restricted Subsidiary with respect to obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bidthe Company or any Restricted Subsidiary arising from agreements for indemnification or purchase price adjustment obligations or similar obligations, performance earn-outs or other similar obligations or from Guarantees or letters of credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such an agreement, in each case incurred or assumed in connection with the acquisition or disposition of any business, assets or Capital Stock of a Restricted Subsidiary;
(11) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary issued for in exchange for, or the account net proceeds of which are used to renew, extend, substitute, defease, refund, refinance or replace, any Indebtedness, including any Disqualified Stock, incurred pursuant to Section 4.06(a) and clause (2), (3), (7), (11) or (12) of this Section 4.06(b);
(12) the incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt in connection with a transaction meeting any one of the three alternative financial tests set forth in Section 5.01(a)(3);
(13) Indebtedness of the Company or any Restricted Subsidiary with respect to any obligation 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, provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;
(14) Indebtedness consisting of the financing of insurance premiums in customary amounts consistent with the operations and business of the Company and its Restricted Subsidiaries; and
(15) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (1) through (14) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the ordinary course aggregate principal amount of business, including guaranties all such Indebtedness shall not exceed the greater of (x) $50,000,000 and letters (y) 2.5% of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million Adjusted Consolidated Net Tangible Assets outstanding at any one time in the aggregate.
(c) For purposes of determining compliance with this Section 4.09Section, in the event that an item of Indebtedness meets the criteria of more than one of the types of Indebtedness permitted by this Section, the Company in its sole discretion may classify or reclassify such item of Indebtedness and only be required to include the amount of such Indebtedness as one of such types (or to divide such Indebtedness between two or more of such types); provided that any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition Indebtedness under the Senior Credit Facility which was in existence on the Prior Issue Date (after giving effect to the application of the net proceeds from the Prior Notes) shall be deemed to have been incurred pursuant to clause (1) of subsection (b) above rather than subsection (a) above.
(d) Indebtedness permitted by the Company this Section need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness.
(e) Accrual of interest, accretion of principal or liquidation preference (or similar amount) in respect of Preferred Stock or amortization of original issue discount, and the Restricted Subsidiary payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the accretion or payment of dividends on any Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section; provided, in each such case, that the amount thereof as accrued shall be included as required in the calculation of the Consolidated Fixed Charge Coverage Ratio of the Company.
(f) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness denominated in a foreign currency, the dollar-equivalent principal amount of such Indebtedness incurred pursuant thereto shall be calculated based on the relevant currency exchange rate in effect on the date that such Indebtedness was incurred.
(g) If Indebtedness is secured by a letter of credit that serves only to secure such Indebtedness, then the total amount deemed incurred shall be equal to the greater of (x) the principal of such Indebtedness and (y) the amount that may be drawn under such letter of credit.
(h) The amount of Indebtedness issued at a price less than the time such Person becomes a Restricted Subsidiaryamount of the liability thereof shall be determined in accordance with GAAP.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) Guarantees by the incurrence Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that represents:
(A) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;
(B) obligations under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries Subsidiaries, whether through the direct purchase of Hedging Obligations such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under Hedging Contracts that are this clause (i7) did not in each case at the ordinary course time of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risksincurrence exceed the Fair Market Value, respond to commodity market conditions and/or implement optimization strategies as determined by the Company in the conduct and management good faith, of the Company’s and its Restricted Subsidiaries’ businessacquired or constructed asset or improvement so financed;
(5) the incurrence by 8) Indebtedness of the Company or any Guarantor in connection with (A) one or more standby letters of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds credit issued for the account of the Company or any Restricted Subsidiary a Guarantor in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); business and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.50:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities (other than the Subsidiary Guarantors Unsecured Credit Agreement) in an aggregate principal amount at any one time outstanding under this clause (i) not to exceed the greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or of (i) the Company pursuant to the Unsecured Credit Agreement and the Notes (other than Additional Notes) and (ii) any Guarantor (x) in effect on respect of its Guarantee of the Original Issue DateCompany’s obligations under the Unsecured Credit Agreement and (y) pursuant to a Note Guaranty of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on March 22, 2007, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt;”
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guaranty, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) the incurrence Guarantees by the Company or any Guarantor of its Restricted Subsidiaries any Indebtedness of Hedging Obligations the Company or any of the Guarantors which is permitted to be incurred under Hedging Contracts that are this Indenture;
(iA) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business and not for speculative purposes and (ii) intended with respect to be commercially or economically appropriate to mitigate or manage risks, respond to commodity market conditions and/or implement optimization strategies in the conduct and management of the Company’s and its Restricted Subsidiaries’ businessIndebtedness permitted by this Indenture;
(5B) the incurrence by the Company or any of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(67) in-kind Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price or cost of construction or improvement of property used in the business of the Company, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $50,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under this clause (7) did not in each case at the time of incurrence exceed the Fair Market Value, as determined by the Company in good faith, of the acquired or constructed asset or improvement so financed;
(8) Indebtedness of the Company or any Guarantor in connection with
(A) one or more standby letters of credit issued for the account of the Company or a Guarantor in the ordinary course of business and
(B) other letters of credit, surety, bid, performance, appeal or similar bonds, bankers’ acceptances, completion guarantees or similar instruments; provided that, in each case contemplated by this clause (8), upon the drawing of such letters of credit or other instrument, such obligations are reimbursed within 30 days following such drawing; provided, further, that with respect to clauses (A) and (B), such Indebtedness is not in connection with the borrowing of money or the obtaining of advances or credit;
(9) obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(710) Indebtedness in respect of bid, performance or surety bonds issued for the account of the Company or any Restricted Subsidiary in the ordinary course of businessarising from agreements for indemnification or purchase price adjustment obligations or similar obligations, including guaranties and earn-outs or other similar obligations or from Guarantees or letters of credit supporting credit, surety bonds or performance bonds securing any obligation of the Company or a Restricted Subsidiary pursuant to such bidan agreement, performance or surety obligations (in each case other than for an obligation for money borrowed); and
(8) Indebtedness incurred to finance or assumed in connection with the acquisition, construction, acquisition or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness disposition of any Person that becomes a Restricted Subsidiary by mergerbusiness, consolidation assets or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes Capital Stock of a Restricted Subsidiary.;
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)
Limitation on Indebtedness and Disqualified Stock. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any manner become directly or indirectly liable for the payment of or otherwise incur, contingently or otherwise (collectively, “incur”) ), any Indebtedness (including any Acquired IndebtednessDebt and the issuance of Disqualified Stock), and unless such Indebtedness is incurred by the Company shall notor any Guarantor and, and shall not permit any in each case, the Company’s Consolidated Fixed Charge Coverage Ratio for the most recent four full fiscal quarters for which financial statements are available immediately preceding the incurrence of its Restricted Subsidiaries to, issue any Disqualified Capital Stocksuch Indebtedness taken as one period is at least equal to or greater than 2.25:1.
(b) Notwithstanding the prohibitions of Section 4.09(a)foregoing, the Company and its and, to the extent specifically set forth below, the Restricted Subsidiaries may incur any each and all of the following items of Indebtedness (collectively, the “Permitted IndebtednessDebt”):
(1) the incurrence by Indebtedness of the Company and or any Guarantor (whether as borrowers or guarantors) under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the Subsidiary Guarantors greater of (x) Indebtedness represented by the Series 1 Notes issued on the Original Issue Date and any Series 1 Additional Notes issued in connection with the payment of interest thereon, $1,750,000,000 and (y) Indebtedness represented by the Series 2 Notes issued on the Series 2 Issue Date and any Series 2 Additional Notes issued in connection with the payment 30.0% of interest thereonAdjusted Consolidated Net Tangible Assets;
(2) Indebtedness outstanding or in effect on of (i) the Original Issue DateCompany pursuant to the Notes (other than Additional Notes) and (ii) any Guarantor pursuant to a Note Guarantee of the Notes (including Additional Notes);
(3) the incurrence by Indebtedness of the Company or any Guarantor outstanding on the Issue Date, and not otherwise referred to in this definition of its Restricted Subsidiaries of “Permitted Debt”;
(4) intercompany Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided provided, however, that:
(iA) if the Company or any Guarantor is the obligor on such Indebtedness and a Subsidiary Guarantor is not the obligeeIndebtedness, such Indebtedness must be (except in respect of intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Company and its Restricted Subsidiaries) expressly subordinated to the prior payment in full in cash of all Convertible Note Obligationsobligations with respect to the Notes, in the case of the Company, or if the Note Guarantee, in the case of a Subsidiary Guarantor is the obligor on such Indebtedness and neither the Company nor another Subsidiary Guarantor is the obligee, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Convertible Note ObligationsGuarantor; and
(iiB) (Ai) any subsequent issuance or transfer of Equity Interests Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary of the Company thereof (other than pursuant to a Credit Facility) and (Bii) any sale or other transfer of any such Indebtedness to a Person that is neither not either the Company nor or a Restricted Subsidiary of the Company will thereof, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (34);
(45) Guarantees by the incurrence Company or any Guarantor of any Indebtedness of the Company or any of the Guarantors which is permitted to be incurred under this Indenture;
(6) Indebtedness of the Company or any Restricted Subsidiary that represents:
(A) obligations pursuant to Interest Rate Agreements entered into in the ordinary course of business with respect to Indebtedness permitted by this Indenture;
(B) obligations under currency exchange contracts entered into in the ordinary course of business; and
(C) obligations pursuant to hedging arrangements (including, without limitation, swaps, caps, floors, collars, options and similar agreements) entered into in the ordinary course of business for the purpose of protecting, on a net basis, against price risks, basis risks, or other risks encountered in the Oil and Gas Business;
(7) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations (whether or not incurred pursuant to Sale Leaseback Transactions) or Purchase Money Obligations or other Indebtedness incurred or assumed in connection with the acquisition or development of real or personal, movable or immovable, property in each case incurred for the purpose of financing or refinancing all or any part of the purchase price, lease expense, rental payment or cost of construction or improvement of property used in the business of the Company or any of its Restricted Subsidiaries Subsidiaries, whether through the direct purchase of Hedging Obligations such property or through the purchase of Capital Stock of any Person owning such property, in an aggregate principal amount pursuant to this clause (7) (together with the aggregate principal amount of any Permitted Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (7)) not to exceed $100,000,000 outstanding at any time; provided that the principal amount of any Indebtedness permitted under Hedging Contracts that are this clause (i7) did not in each case at the ordinary course time of business and not for speculative purposes and (ii) intended to be commercially or economically appropriate to mitigate or manage risksincurrence exceed the Fair Market Value, respond to commodity market conditions and/or implement optimization strategies as determined by the Company in the conduct and management good faith, of the Company’s and its Restricted Subsidiaries’ businessacquired or constructed asset or improvement so financed;
(5) the incurrence by 8) Indebtedness of the Company or any Guarantor in connection with (A) one or more standby letters of its Restricted Subsidiaries of obligations relating to net Hydrocarbon balancing positions arising in the ordinary course of business;
(6) in-kind obligations relating to net oil or gas balancing positions arising in the ordinary course of business;
(7) Indebtedness in respect of bid, performance or surety bonds credit issued for the account of the Company or any Restricted Subsidiary a Guarantor in the ordinary course of business, including guaranties and letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed); business and
(8) Indebtedness incurred to finance the acquisition, construction, or improvement of fixed or capital assets (including Capital Lease Obligations) not exceeding $1.0 million in the aggregate.
(c) For purposes of this Section 4.09, Indebtedness of any Person that becomes a Restricted Subsidiary by merger, consolidation or other acquisition shall be deemed to have been incurred by the Company and the Restricted Subsidiary at the time such Person becomes a Restricted Subsidiary.
Appears in 1 contract
Sources: Indenture (Sandridge Energy Inc)